BY: Tracy Issel, General Manager, Worldwide Retail, Consumer Goods, Hospitality & Travel at Microsoft
As consumers, we’re all familiar with the experience of walking out of a fitting room in an apparel store with a pile of clothes left behind. The “abandoned cart” where items are left in a shopping cart but never purchased has long plagued the retail industry. What kept interest from translating into a sale? Was it the inability to find the right color or size of clothing, an unresponsive store clerk, price, or a last-minute competitive offer the consumer sighted on her mobile device? One recent study showed that up to $4 trillion worth of merchandise will be abandoned in shopping carts in 2014. It is no surprise then that retailers are getting serious about growing their data smarts—not just to better understand the consumer experience but ultimately to have informed, smarter decisions happen at every step of the retail chain across the life cycle of a product—from smarter sourcing to smarter supply chain, inventory and overall operations management to smarter social data mining and smarter post-transaction engagements with old and new customers.
Microsoft recently commissioned a global study with IDC to understand the potential value of data and the results underscored why data has become central to retail discussions. The research (see highlights below) showed that the retail industry stands to benefit $94B in potential untapped value over four years—what we call a “data dividend”—by getting data smart. By connecting the right data sources, using modern analytics tools to glean insights from data and sharing that business intelligence broadly, retailers could potentially see a 60 percent greater return on their data assets compared to their peers who don’t.
Personalization is the term de jour in retail today—how do you make offers and create experiences that are tailored to consumers without crossing the creepy line, whether they’re shopping in a retail apparel store or vacationing on a cruise liner? Historically, merchandising has been a forward-looking endeavor based on projected upcoming trends, but data and predictive analytics and visualization technologies provide retailers a huge opportunity to capitalize on past purchasing preferences.
In a mobile-social world where consumers are more empowered than ever before, the problem isn’t access to data but understanding what to do with it. Unlocking that “data dividend” potential involves not just an ability to capture and store data but surface easily digestible insights from it as readily and easily to the customer service associate as a boardroom executive. This is where, combined with our proven data platform, the powerful visualization capabilities in PowerBI served up through Office 365- the most widely used productivity suite, can be truly transformative to a retail operation. At the end of the day—technology trends like the Internet of Things, big data and Machine Learning are of little interest to those who live outside the “tech bubble” unless we show our customers how to translate them into measurable data dividends for their business!