Retail Trends: How Big Data is Changing Retail (And What It Means for Wholesale)
With the worlds of wholesale and retail very much interdependent, it is critically important for wholesalers to remain attentive to the broad trends overtaking retail and consumer buying habits. Just as retail’s maturing omni-channel trend is seeping into the wholesale landscape with the rise of B2B eCommerce, for instance, there are many nascent and growing retail trends that may also have a lasting effect on wholesale brands, manufacturers, and distributors. In this new Retail Trends series, we’ll be talking about what’s going on in the world of retail, and what it means for wholesalers. Because ultimately, it’s not about trends; it’s about opportunities. Today, we focus on how data analytics are changing the way retail stores operate, and how one brand is already leveraging big data in a big way.
Retail Trends: The Growing Importance of Big Data
According to Dan Berthiaume, Senior Editor of Chain Store Age,
2015 will see retailers turning more attention to data analytics. Berthiaume asserts, “granular analysis of individual SKU performance metrics can allow retailers to adjust merchandise assortments and promotions on the fly, improving inventory throughput while avoiding the need for costly end-of-season markdowns.” Not only are retailers using data to predict trends and prepare for demand, they will also eventually be able to use real-time analytics to provide more personalized, tailored experiences to their customers across channels––whether it’s in-store or online. These kinds of initiatives are not exclusive to national chains. With a myriad of low-cost, accessible technology solutions on the market, small and medium independent retailers are also benefiting from the big data boon. For instance, Swarm (recently acquired by Groupon) is a service that allows independent retail stores to measure foot traffic, predict patterns, and staff their stores accordingly. They can also connect that information to a POS system, calculating a physical in-store conversion rate (i.e the percentage of store visitors who actually make a purchase). Systems like this are not just becoming de rigueur, they’re becoming an essential part of more and more retailers’ inventory planning, marketing, staffing, and customer service strategies.
What Retail’s Big Data Trend Means for Wholesale
As retailers begin to rely more on data analytics to run their stores, they will require more flexibility, knowledge, and expertise from their wholesale suppliers. The days of simple catalog and price sheet selling are over. Wholesale brands and their sales reps must be able to work hand-in-hand with retailers to leverage data insights. For instance, power tool manufacturer Stihl distributes their products only to independent retailers. In order to compete with other gas-powered outdoor tool brands sold at big box stores like Home Depot and Lowe’s, the company works directly with retailers to track sales and optimize marketing efforts. One revelation that resulted from looking at the data? If retailers had focused on the 30 to 40-year old demographic in certain marketing campaigns, they could have captured a combined $200 million in additional sales. Brands––especially those in the mid-market––have an enormous opportunity to leverage data and work more closely with retailers to maximize sales on both sides of the chain. Questions about data’s emerging role in both wholesale and retail markets? Let us know in the comments below.