While retailers are fixated on data-driven marketing this year, many are consumed by the volume of data gathered while also not being fully satisfied with how its leveraged, according to the latest poll from CommerceNext.
The survey, sponsored by Bluecore, “found that retailers are consistently dissatisfied with their ability to measure and activate data effectively, as well as its impact on marketing success and return on investment,” the company said in a statement adding that the “sheer volume of data overwhelms retailers, making it challenging to analyze and implement data-driven strategies effectively, ultimately hindering potential sales and profit growth, but by employing the appropriate tools and expertise retailers can effectively utilize its potential and leverage it to their advantage.”
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The poll found that 80 percent of respondents gave their organization a grade of 60 percent or lower (and with an overall survey grade of 48 percent) in regard to customer retention, purchase frequency and lifetime value. Regarding using data for new customer acquisition, respondents gave themselves a 54 percent grade. Larger retailers, with sales over $500 million, gave themselves a 65 percent grade. SMB-sized retailers gave themselves a 50 percent grade.
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Those polled also consistently noted using existing data as a “missed opportunity” to drive sales and profits. The research showed that 90 percent of those polled “use core web analytics and behavioral data for marketing campaigns, but less than 50 percent use POS, price/inventory changes or customer care interactions, a surprisingly low percentage given the potential for rich insights direct from customers,” the report’s authors said.
CommerceNext said by analyzing POS data, “retailers can better understand which items sell best and adjust their assortments accordingly,” and noted that retailers can also optimize “pricing strategies and inventory levels based on sales data, reducing costs and improving margins.”
Scott Silverman, cofounder of CommerceNext, said in the current economic environment, “retailers that maximize more of the resources available to them, including and especially marketing data, have a competitive advantage. As this study shows, there is room for improvement when it comes to using marketing data to drive growth, and we hope this study serves as a data point for retailers to direct more resources to this area.”
Fayez Mohamood, cofounder and chief executive officer of Bluecore, said that getting ahead of the customer “is essential to a retailer’s ability to grow and beat the competition — this requires turning customer signal into customer spend and monetizing the data they have with quicker activation into campaigns. The brands who are seeing growth right now in this environment have been able to redefine their process with this deeper level of understanding and strategy.”