Whilst thousands have been furloughed in recent months, retail managers have experienced the pandemic in a completely different way. Long days start with early meetings to assess data from the day before and end with late efforts to gather information from multiple sources to try to prepare for what might happen tomorrow. This manual cranking of data faster and faster has become the daily routine for many. Striving to streamline and respond faster by increasing reporting frequency gives the impression of speed but is pressuring the body of the business to move faster and faster with little sense of direction. There is a danger of becoming zombie-like, driven by pure reflex with little intellect.
I find it useful to represent a retailer as an organism. Core systems, inventory, cash and resources management represent the heart and lungs of the business – essential functions that keep it alive. Logistics and replenishment, pricing and ranging, sales channels, marketing and promotions; these are the limbs of the body. They activate and effect the web of relationships that represent the retailers’ world. These two aspects work in harmony, creating, using and collecting data to ensure smooth functioning of the overall organism. More and better data makes this body fitter. It can move faster and with more power if the various constituent elements have a good supply of data.
And this is where many retailers find themselves. Different limbs have had different work-outs and developed in different ways. What’s missing is a brain that can direct the body into different paths and ways of behaving. Without this ability to analyse and decide, retailers become zombie-like, repeating the same routines regardless of the changing situation. They may have created very fit zombies which can be highly effective in limited circumstances, but they are unable to adapt rapidly and flexibly to meet new ones.
The modern retail environment, exacerbated, but not created by COVID-19, favours organisms that can quickly adapt and respond. Businesses that can decide to do things differently, or to do entirely different things, will be the ones to prosper. Data lies at the heart of this. As McKinsey recently said
: “Companies that have already invested in AI capabilities will find themselves significantly advantaged. Making further investments now - even if you’ve yet to get going - will continue to pay out post-crisis as well.”
But there’s more to it than just having the right data. Taking decisions to do things differently requires a change in mindset and approach. That requires a brain which uses data from across the whole body in new ways. Rather than using data analytics to improve one process, which is like exercising just one bicep, retailers need to use data to change the way the whole body acts as a single entity.
Instead of collecting data focused on reporting day to day processes, the retailer of the future will use it to coordinate and undertake new more complex movements. They will use a data brain to develop new agility and effective responses to rapidly evolving situations. Crucially these leaders will use big data and analytics to distil deep understanding of the complex interactions between thousands of business processes and millions of customers across their business ecosystems.
The data brain must operate in real-time. Basing decisions on what happened last month, last week or even yesterday is increasingly perilous. Insight is only useful if it can drive a positive business outcome, and that means acting in the moment. Knowing and doing need to become almost instantaneous, and that means connecting the brain to the body. A brain without a body is as useless as a body without a brain. The retailer of the future
will connect the two in such a way that they are predicting and solving the problems of tomorrow, rather than constantly reacting to those of yesterday and today.