Retail has reached a tipping point. As digital retailing has grown to a significant share of the business, the shopper journey has become more complex and sophisticated than ever before. Yet when it comes to the analytics retailers rely on to truly understand—and listen to—the customer, multichannel retailers remain trapped within the bounds of brick and mortar information concepts.
Digital retailing leaders, such as Amazon, on the other hand, are not encumbered with old retail concepts. They have supreme visibility into their shopper’s entire journey, enabling them to measure, monitor and anticipate changing shopping behavior and get smarter every day with their innovations. They also have a culture of driving decisions through data: take for instance the recent announcement to reduce dependency on FedEx based on the shipper’s declining on-time performance. Amazon took it upon itself to collect this on-time performance data and act upon the resultant analysis.
It’s no surprise that many trusted retail brands find themselves losing market share and customer relevance. While the digital retailing leaders who are winning in today’s retail economy are almost never ignorant of what their consumer is telling them—we can’t say that for traditional retailers now operating in multiple channels, who are in a losing race as they patch analytics to keep in step.
As the old saying goes, “you treasure what you measure.” To succeed in the digital-first economy, established retailers must commit to measuring and monitoring their success according to a new slate of metrics and KPIs.
Traditionally, retailing has always measured itself based conversion rate, promotional response, comparative sales, margin and inventory performance. Getting those right was the definition of success. The trouble now is that every one of these time-worn measures requires a new definition in the digital age. The old definitions have relevance only as historical reference points. Without revitalized metrics, retailers are driving into the rear view mirror.
|Old metric||New metric|
|Conversion rate||Digital conversion rate|
|Promo sales uplift||Customer response|
|Comp Store||Comp market, comp customer|
|Gross Margin||True Margin|
|Inventroy performance||Availabity performance|
Progressive retailers recognize this and are redefining their “North Star” and operational KPIs so their businesses can become forward-looking and anticipatory in the way they serve customers.
Jeff Buck is the CEO and cofounder of Robling. Robling helps retailers become truly data-driven organizations with its purpose-built retail data as a service (DaaS) solution hosted on Snowflake’s powerful, elastic low-cost cloud platform. With Robling DaaS, retailers can unlock net-new value by unifying and operationalizing data across merchandising, e-commerce, customer and supply chain systems. Robling customers include Belk, Fresh Thyme and Hot Topic.