Retailers must look to develop customer information hubs to remain competitive, says IMGROUP

Philpott: understanding customers is biggest challenge

Philpott: understanding customers is biggest challenge

Retailers must move towards a Customer Information Hub (CIH) to overcome data challenges and better target and build relationships with customers in 2014, according to a new IMGROUP whitepaper.

The report explains that whilst data is one of the most valuable assets for a retailer, it is also one of the most contentious with issues around internal ownership, integration and resource being commonplace. However, retailers must look to address these issues and move one step further on from a Single Customer View (SCV).

However, many retailers still currently view data in silos and are unable to gain as much value as possible from it as a result. The IMGROUP report outlines some of the key questions that retailers should be stepping back and asking themselves:

  • Am I making effective use of all the data streams I have at my disposal?
  • Am I too reliant on traditional data?
  • How much is it currently costing me to turn data into insight and is it being done fast enough?
  • Am I clear who owns the data and do they understand what is needed to make it valuable?
  • What can I learn from what has gone before?

While SCV focuses on pulling together data on a single customer, CIH looks to extend that to all information relevant to that individual. This could include product information, data from the supply chain and marketing. Being able to pull this data together and underpinning it with the right analytical tools then puts the retailer in a position to automate analysis of customer data along with the possibility of a system that suggests the best way to respond to that data.

In addition to identifying the questions retailers must look at in regard to their data, IMGROUP’s research also identifies four broad categories that most of today’s retailers fall into:

1.       Leaders – brands at the forefront of the retail industry today and responsible for determining the major trends. They include powerhouses like Tesco, Amazon, eBay, Wal-Mart and John Lewis and are the companies the markets look to, to define success or failure

2.       Followers – many of these are what we would describe as ‘traditional retailers’. They include world famous brands such as WH Smith, Boots, Marks & Spencer and Next. They were born on the high street and many have struggled to keep up with the changes the last decade has delivered

3.       Innovators – while innovation is happening across every category, this group contains the companies that are building their own sectors by challenging pre-conceived ideas about how retailers operate. Whether it is the high tech showrooming from Apple or the artisan collective approach of NotOnTheHighStreet.com

4.       Specialists – these are retailers whose outlet numbers are often small, but whose catchment area can be large. Companies like Sofa Workshop, Paperchase, Mulberry and Body Shop fall into this category. A hugely diverse category these companies need to make sure they are destination brands in their own right

Martin Philpott, head of retail at IMGROUP, said: “These days a combination of technology, declining customer loyalty, the need for instant gratification and an explosion in the number of choices we have as consumers means that relationships with customers are no longer personal.

“Understanding who customers are, what they want and how and where they want it has become perhaps the biggest challenge that retailers face, and they must ensure their data architecture, business processes and people are in the right place so that they can put themselves within touching distance.”

The full whitepaper entitled ‘Getting on the front foot: The role of data in driving competitive advantage for retailers’ can be downloaded at Getting_On_The_Front_Foot