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The finding was revealed as part of HRC’s latest retail industry study, which found that outdated organizational structures and processes, non-integrated IT platforms and a lack of a clear road map are major barriers preventing customer data in enabling a retailer’s omnichannel efforts.
“Retailers are inundated with consumer data and research, but the reality is the vast majority are not able to effectively use it,” said Farla Efros, executive vice president and chief operating officer of HRC Advisory. “Despite the impact of fast moving competitors like Amazon, more digitally savvy consumers and a volatile economy, many retailers are still planning and managing their businesses based on traditional brick-and-mortar practices. The changing dynamics of today’s retail environment require new approaches to meet the challenges and opportunities presented by today’s consumer, and retailers need to update and integrate their organizations accordingly to avoid the lost sale.”
Significant findings of the report include:
• Retailers aren’t leveraging customer data in a structured way. Only 9 percent of retailers studied are effectively leveraging their vast amounts of customer data in a structured way as part of their merchandise buying and planning processes. Some 87.2 percent of retailers in the study plan to focus on more effectively using customer data to grow sales, but only 65.4 percent are actually in the very early stages of such efforts.
• Retailers aren’t operationally structured for omnichannel. Most retailers (87.2 percent) surveyed said they have taken initial steps toward or are planning to initiate an organizational change to better integrate processes across all purchase channels. But for 88.2 percent of retailers surveyed, e-commerce operations and marketing largely remain separate silos.
• Inventory isn’t being fulfilled effectively. 84.5 percent of retailers surveyed (across all sectors) said they are focused now or over the next 12 months on enabling new fulfillment options to avoid the lost sale. However, only 10 percent of retailers surveyed have the capabilities to effectively fulfill from store, which is a way for them to contain fulfillment and return costs, as well as avoid some markdowns.
• Retailers have not found the right balance between online exclusives and product available in all their channels. Less than half (42.5 percent) of the retailers surveyed said they had or were exploring “online exclusives” beyond color and size extensions to new categories and brands, while 66.2 percent of retailers are primarily focused on size and color extensions to address the realities of constrained brick and mortar space and slow inventory productivity.
“First and foremost, retailers need to recognize there has been a meaningful shift in power towards the consumer resulting from today’s numerous ways of purchasing and much increased price transparency,” Efros said. “In order to mitigate this shift and maintain market share, retailers need to adequately differentiate on the right combination of unique and/or exclusive products that are valued by the customer, while providing exceptional service and a compelling in-store experience that can’t be matched by newer pure play online competitors.”
Source: HRC Advisory
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