How data analytics has changed retail business in India - Nilesh Satpute, Founder & CEO of Applied Cloud Computing
A few years back, omnichannel was just a buzzword in India which would
pop up in every meeting. It was being hailed as the future of retail, but the
real-life examples were then missing. Online marketplaces like Flipkart and
Amazon were doing their job and expanding categories, launching their apps, and
retail shops were doing their own business. Noone then understood how these two
worlds would gel well together.
What changed?
But, it's a different world in retail today.
A customer enters a shop or a mall, if he/she is buying the first time,
shares his/her or number, earns loyalty points and goes home. Many retailers
send the bill via text message or WhatsApp and then constantly stays in touch
by notifying the customer of offers or sales available in their offline outlets
or online, directs one to download the app and so on.
In case of a regular customer, the offline retail outlet already has
customer details in the system, looks for their preferences and many a time
this also helps them make more purchases, driving more sales.
Now among the online retailers, analytics is helping a brand to create a
customer profile. Understand his/her shopping choices, buying frequencies,
choice of size, colour, buying patterns and based on these understandings,
everytime the brand has his/her kind of product notifies the customer, can send
messages or mails of the type of products that will be soon available and much
more.
It just does not stop at brands. For instance, even warehouses who
handle the storing and delivery of products, rely heavily on analytics to
understand granular details like cataloging of products, returns, making these
products deliverable and so on. Analytics help these warehouse managements to
bring in efficiency to the process, make it easier and faster, and make the
experience better for the customer. This has also led to shorter delivery
times, cut expenses
With these kinds of personalized experiences, brands inevitably can
better retain their customers, acquire more customers at a lesser price and
drive more purchases. This is what analytics is doing in reality today.
Inside the world of
analytics
By 2025, the global market share for Customer Data Platforms (CDPs) is
expected to increase to USD $10.3 billion from USD $2.4 billion in 2020. This
clearly indicates that the scope of the market is the enormous opportunity that
it has to offer.
However, collection and analysing of data is also a sensitive topic.
Many times it leads to breach of privacy of customers. Hence, the storing of
data is crucial.
Data should be segregated based on personal data, engagement data,
behavioural data and so on. But, while such data can be collected via apps,
websites, at offline outlets, what remains crucial is the customer is aware of
what he/she is being asked and why they are being asked.
Scope of the market
The demand for analytics has led to an explosion of customer data
analytics platforms. While many have built in-house capabilities, many are also
relying on third-party capabilities to collect such data.
However, it's only the tip of the iceberg. The data that has been
collected so far are at shopping malls, apps, payments gateways, but beyond it
the retail industry has not seen the power of analytics yet. For instance, the
neighbourhood store from where one buys their monthly essentials. Thousands of
such stores have not been powered through analytics yet. Many have started
putting their inventory but not their customer needs.
We already have a silver lining to it with the Government's new
initiative of Open Network Digital Commerce (ONDC). This technology which
promises to digitize stores can be a game-changer for the industry in the
coming months. With a fraction of a cost, retailers will be able to do their
best for every single customer, just based on analytics.
If every online and offline retail store gets its way through analytics, retail will see much more efficiencies in systems as it will lead to better planning, storing, and understanding the market needs depending on geographic locations, demographics etc. It has the potential to take the industry to new heights.