woensdag 30 december 2020

New Inroads for Analytics in the Post Corona Era


OK, 2021 will not get rid of the virus immediately but the new consumer behaviour, induced by the pandemic will have lasting effects that need to be taken care of by brand owners, distribution channels and -consequently- by the analytics approach and infrastructure.

So, what is exactly this new consumer behaviour?

You already guessed: more online shopping and more pervasive switching to web shops from the local shops to compete with the incumbents. The local shop owners finally have understood the value of proximity combined with the convenience of online browsing and online ordering or preordering and collecting the order at the local shop.

But there’s more. Not only have the predominant shopping logistics changed; the product range has also undergone the influence of the various lockdown periods. Consumers have a tendency to shop for more luxury products in the food section as a means of self-indulgence and the dichotomy between convenience and fun shopping is getting clearer and larger. Some retail chains are already experimenting with automatic replenishment of convenience products using automated algorithms. But some supermarkets in the Benelux are combining convenience, fun and self-indulgence offering prepared meals that can be consumed in the shop. Plus, Albert Heyn and Jumbo are experimenting with the concept. This can have an impact on local restaurants who have survived on their take away service during the pandemic.

Due to Covid-19 this section where you can have a meal at a Plus supermarket is closed...

And how does this emerging consumer behaviour affect the analytics profession?

The larger distribution chains will continue to develop their centralised analytical systems. The data flows from the outlets’ cash registers to the central data warehouse and delivers customer and product insights as this has been the case since AC Nielsen built the first embryo of a retail data warehouse somewhere in the seventies.

New opportunities for innovation in analytics for large retailers lie in edge computing. Think of directed dialogues with the customer, analysing conversion rates from looking at products, holding them, inspecting them and finally putting the product in the shopping trolley and feeding it back to the pricing and communication in the isles.

Now, as local shops discover the value of customer data, syndicators will emerge to provide economies of scale and of scope to aggregate data of the local shops and provide benchmarks and high level customer insights as a first deliverable. It will take some serious investments in persuading the local shops to share their data but it will happen in the next three to five years. My experience with a data warehouse project for an association of independent retailers tells me it’s doable if you mimic the architecture of epidemiological analytics. These systems have the highest levels of information security combined with state of the art analytical capabilities. And so another product of this pandemic may contribute to new analytical solutions.

But the major shift in the analytics landscape is happening with the brand owners. Up to now, most brand owners were OK with the idea that customer behaviour data resided in the systems of large retailers. Some of the clever ones developed a data sharing approach with the retailers accepting the possibility of a biased view on their final customers.

Now the need for massive customer data for brand owners is unavoidable. New ways of collecting unfiltered customer data will emerge. Smartphones, fit bits and other devices will have new roles to play in this strategic movement.