Using data and analytics as a compass for the future
We’ve all read the headlines proclaiming data to be the new oil; the panacea for all business woes and the font at which c-level executives should be worshipping.
And yes, it is true, data is important, but few organizations understand how to structure their decision-making around transformational insight as opposed to fanatically collecting, storing and analyzing as much data as possible about their customers with the blind faith that doing so will enhance operations. In today’s data-rich, machine learning, advanced analytical environment the tendency is to collect more and more data, and the challenge, therefore, lies in managing and extracting real value from that data. In neurological terms information is ‘addictive’: it ignites a hoarding compulsion. This coupled with a significant reduction in the price of data storage, and the growth of analytics means the amount of data collected by organizations is increasing. In a recent survey of CEOs a quarter admitted that their organization collects significantly more data than it needs particularly transactional customer data.
However, effective decision-making comes from a holistic understanding of the entire ecosystem not just a one-dimensional view of a customer’s transactional history. Instead, gaining a picture of the things that are important to people, what motivates them, what demotivates them, what views they hold provides an understanding of trends that can be used to shape the direction of travel for the business. In this way the data becomes a guiding light and the analytics a beacon. Take Amazon, for example, an algorithm demonstrated that during the pandemic shorter delivery windows led to more frequent purchasing and bigger spending. Consequently, in the US the company has pledged to make one-day delivery, with two-hour slots the default for all Prime members when ordering groceries and the company is now spending billions of dollars in growing its warehouse structure and delivery infrastructure. A spokesperson for the company said: “every time we invest in the services that customers love, we expect that to grow sales for sure.” Makes sense doesn’t it? The key, however, is determining what these drivers are. The famous Henry Ford quote: “If I had asked people what they wanted, they would have said faster horses” is spot on. More often than not customers don’t know what they want, which is why having a broad view of the market environment is so important. However, increasingly businesses also don’t know what’s best and that’s where the power of data and cutting edge analytics come in which are able to uncover unknown opportunities.
All too often businesses fall into the analytics trap of using data to take a backwards, not forwards looking stance. analyzing past behavior and using this to predict what might happen next. But rarely is yesterday the same as tomorrow. None of us have a crystal ball, however, applying creative thinking to the insights that come from data provides the next best thing. It gives a powerful platform to imagine what will be coming next –a window into the future.
Unsurprisingly, the impact of the pandemic has made this forward-looking view even more critical. The world has never experienced such monumental change so quickly and for many organizations the way they used to do business is now unsustainable, even with the return to ‘normal’ on the cards. People now think very differently to how they did just 18 months ago and this is having a significant impact on every sector. Now is the time to take stock and to assess the changing needs, behaviours and concerns and align the business so that it meets the emotional and practical needs of the customer base.
A report by the International Monetary Fund (IMF) reveals that the UK economy is recovering faster than expected from Covid with growth forecasts being upgraded amid the success of the vaccine program and stimulus packages. Recovery is the name of the game and insight will be a key differentiator for brands wanting to capture market share. Already we are seeing organizations such as M&S carry out strategic insight reports to help deliver brand promises. Its new Family Matters Index, which will be carried out quarterly, enables M&S to provide trusted value on the things that matter most to its customers. Core to M&S’s transformation is being more relevant, more often to people and this means making its ranges more accessible. It has used the report to enhance and introduce new initiatives such as catering for more customers’ needs. M&S clothing plays a role in the big and small family moments – from being the destination to pick up the first school uniform (M&S sells 5 million school shirts every year), the first bra (1 in 3 bras in the UK is bought in M&S) to the first suit for an interview or a prom. The company has listened carefully to customer feedback to develop.
Navigating the choppy waters of recovery
‘Easy Dressing’ adaptive ranges that support specific needs and make the everyday that little bit easier for more families – including specially made hip dysplasia clothes, feeding tube clothing and zip-up bodysuits. Likewise, M&S food is aiming to help customers celebrate more events: Customers turn to M&S for special occasions – from the UK’s most popular birthday cake (Colin the Caterpillar has attended 10 million birthday celebrations) to the 1 in 4 households that choose M&S for their Christmas Turkey. To make it easier for more customers to enjoy more special occasions, M&S has extended its ranges of vegan products and offered its biggest selection of plant-based Easter products in April. And it is catering for even more occasions – with new expanded ranges designed for events such as Chinese New Year, Passover, Eid, and Ramadan. Alongside this, M&S is working to better reflect the communities it serves in the way it markets events and product ranges to customers. Over the last year, they helped customers who couldn’t be together physically to show they were thinking of each other, extending their range of online gifts and flowers, and as a result, sales of those ranges increased by 184 percent.
As we continue to navigate the choppy waters of recovery it is clear that data and the creative application of cutting-edge analytics will help organizations keep up to date with emerging trends. But more crucially for growth this approach delivers a business orbuculum providing glimpses of the future enabling forward-looking businesses the ability to uncover unknown unknowns – the opportunities that a business had no idea existed. Whilst nobody can predict the future the companies that will win are the ones that can imagine it and then capitalize on this to create real impact, transformation and better connections with their customers.