With global revenue of $22 trillion in 2014, the retail industry contributes a significant portion to the GDP of many countries, employs tens of millions of people and touches nearly everyone.
Whether family-owned-and-operated shops, multinational chains, or e commerce sites, retail businesses must compete aggressively for every consumer dollar—and not all retail organizations are succeeding. Many 2015 headlines touted grim news of long-established brick-and-mortar stores closing.
With the retail industry evolving quickly as consumer demand for goods and services evolves, new competitors enter the marketplace, and new technologies are introduced, the question turns to what retailers can do to successfully compete in this dynamic marketplace.
The answer is three-fold. By differentiating the shopping experience through the meaningful use of technology, personalizing promotions and experiences for customers, and effectively predicting and prescribing what will sell, when, where, and to whom.
And the path to achieving these things is through data.
For those that harness its power, the opportunities are huge. According to a recent IDC report, by 2017, retail companies that take advantage of their data can potentially realize an additional $94 billion in revenue over companies that don’t.
In order to gain insight at a particularly volatile time for the industry, Microsoft recently conducted a survey with 100 retail executives to gain insight into their business challenges and learn about how they are currently using, or plan to use, data analytics and the cloud to stay relevant with today’s consumers.
When asked about their organization’s current business environment, 73% of those surveyed acknowledged that the retail marketplace is changing and 40% are seeing their businesses change rapidly.
Retailers who continue to do business as they always have without evolving their business practices may soon find themselves outpaced and outmatched in a ruthlessly competitive marketplace.
New technologies promise better customer shopping experiences, nimbler inventory management, and expanded access to diverse data that provide retailers with critical real-time insights into their business. To harness these innovations, management must take a proactive approach in close collaboration with diverse teams within their organization.
Forward-thinking retailers who are already tapping into their own vast array of sales, inventory, and customer data to help shape their retail strategy are seeing gains in their KPIs, including increases in year-over-year sales per square foot, store profitability, and overall revenue. In addition, they’re seeing decreases in the percent of inventory markdowns and inventory churn that take a bite out of overall profit.
In a new whitepaper, Microsoft includes insights gleaned from our survey of retail business executives, to provide guidance on evolving retail data business practices and challenges.
It discusses two of the most prevalent business opportunities—personalization and demand forecasting—and explains how current technology innovations in the retail marketplace, combined with cloud- and hybrid-cloud–based solutions, as well as advanced data analytics, can help retailers meet today’s business needs and prepare to thrive in tomorrow’s competitive environment.
And if you are planning to attend NRF 2016, make sure to stop by and see analytics solutions from Microsoft in Booth #2803.
LinkedIn: ShiSh Shridhar