Manufacturing, Retail, High-Tech Firms Need Analytics To Deal With Today’s World

economic-crisis

The current economic, political, and business environments are challenging companies as never before; federal healthcare, a creeping-along economy, terror threats, environmental activism, energy supply concerns, customer financial constraints, and more are all presenting challenges.  Some of these issues are subject to mitigation by traditional methods, while others are not.

 

If ever there was a time for business and industry to embrace advanced analytics, this is it.  Only by using the current environment as input to business intelligence and advanced analytics can companies and organizations hope to deal with the present, much less the future.

 

Fortunately systems are available to help identify and track some of these potential issues; business intelligence and advanced analytics systems can be designed and programmed to track a wide range of issues that affect organizations on a daily basis.  They also are the best tool we have for looking into the future.  If inputs are properly managed, staff is properly trained and motivated and the systems are used to their full benefit, it’s possible now to see the train wrecks before they occur–and hopefully do something about them.

–Warren B. Causey

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Retailers Can’t Remain Stagnant in a Mobile World

Nobody can stand to wait, anymore.  And why should they, with the immediacy and instant gratification offered by mobile devices.  Going from store-to-store to compare prices has gone the way of snail mail, the horse-and-buggy, and discos.  The information age has made obsolete all of the technologies that were downright essential fifteen years ago.  So why, then, is the retail industry so reluctant to make that next step?

 

With each new day, it gets harder and harder to maintain a retail store the old-fashioned way.  We used to say that the kids were the ones who spent too much time on mobile devices, but after a decade, those kids have grown up and become a powerful purchasing demographic.  Over one-third of these “kids” admit to using mobile devices during in-store shopping, whether to compare prices or see what their friends think of the product via social media sites.  And this group of people grows more every day.

 

Aside from in-store purchases, more retailers are looking to the online realm as a way to increase revenue growth by introducing new sales and service channels.  In a recent Aberdeen survey, more than 38% of retailers are in some stage of employing mobile retail technology.  Compare that to only 18% at the end of 2008.  With a growing number of retailers utilizing mobile channels, it will only get harder for retailers stuck in the old ways.

 

This may sound like bad news for those who take pride in their physical stores, but it doesn’t have to be.  The vast majority of consumers—even mobile device users—still prefer to buy items in stores, even if they research it first online.  The need for immediacy works both ways, and most consumers prefer to pick up their purchase when they buy it, as opposed to waiting for it to be delivered.  Furthermore, in the case of households with two working parents, or single working young adults, there’s no one at home to accept the delivery.  The functionality of the physical store is still alive and strong.

Mobile-Retail

The age-old idiom of “the customer is always right” is taking a new shape with the mobile platform.  Smartphones and such devices are putting more power into the hands of the shopper—literally, some of these devices have more power than NASA did in the 60s!  And while some traditionalists lament the loss of high-pressure sales tactics and conversational selling, the smart retailers are making the switch to mobile work for them.  At the end of the day, customers are going to shop at the places where they feel most comfortable, where they have the most control.  If you give them what they want—more mobile options, more control—they will appreciate it.

 

Taking advantage of mobile devices may not be easy, but it’s certainly worth it.  But don’t worry, we’re still a long way from a completely digital marketplace, and there’s still ample time to make the transition at your own pace.  And if all these online opportunities are getting you down, don’t forget this one thing:  you can’t make returns on an iPhone.

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The Shift to Thrift

The recession of 2008 marked the beginning of the “shift to thrift,” a movement which has only gained steam in the last few years.  In harsh economic times, consumers are abandoning their traditional shopping methods in lieu of better deals, at the cost of spending more personal time comparing prices and searching for “undiscovered treasures.”  Consumers are now willing to drive farther to stores, do more research online, and hold off on purchases until they find a deal they’re satisfied with.  Tight financial restraints on personal budgets leave them little option.  To put it simply, consumers today have more time than money.

Thrift_Store_clothingrack

But what exactly does the shift to thrift mean?  It means that today’s customers are more appreciative of a good deal.  Based on a recent AlixPartners study, consumers rank “Product” and “Price” as the two most important factors when deciding where to shop; with “Service” a distant third and “Access” and “Experience” bringing in the rear.  This is a great change from past surveys, when “Service” was ranked almost side-by-side with “Product.”  Today’s shoppers must operate using only the bare essentials.

 

Further studies reveal that, for whatever reasons, customers are feeling betrayed and distrustful of the institutions they once loved, hence the change in shopping habits.  All of this echoes the consequences of the Great Depression in the 1930s.  We’ve all heard stories from the older generations of hiding cash in their houses because they don’t trust banks.  The shift to thrift seems to mirror that, at least in the sense that people are becoming more self-reliant in their spending and wearier in handing over their money.  But experts are quick to point out the differences between our current recession and the depression of 80 years ago. Chris Donnelly, a partner in Accenture’s US retail practice, says that today’s generations grew up in a culture of consumption, in which they’re subjected to powerful marketing forces that encourage spending more on products with greater value.  This might return consuming practices to a more recognizable state in the future, but it won’t make much difference until people have a little more wiggle room with their finances.

 

So what can a retail store do to adapt to the shift to thrift?  For starters, a little empathy couldn’t hurt.  Modern shoppers are not behaving this way on a whim; it is out of necessity that they must severely monitor their purchases.  Keeping that in mind, perhaps it’s time to reevaluate your own strategies.  Are you offering your customers the best value you can?  Are your competitors?  Put yourself in their shoes and shop around—would you choose to shop at your store?  The shift to thrift is causing everyone to change the way they buy.  With all the hits the retail industry has taken recently, the customers aren’t the only ones who need to tighten their belts and take every advantage they can get.

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General Stores Not Entirely Dead

Like many age-challenged people these day, or “the Elderly” as you kids like to call us, I remember a day you went to a neighborhood general store to do your shopping.  These stores usually carried a bit of everything, from clothing to groceries to (especially in the country) tools, seed, etc.  I even worked part-time in a country general store when I was in high school.

 

You can find anything in a General Store

You can find anything in a General Store

The advent of supermarkets generally ended the era of general stores; one I’m aware of although it is part of a chain, Fred’s still has some of the characteristics of a general store.  You can get a little bit of just about everything at a Fred’s.

 

An interesting Analytics Discovery study might be looking at Fred’s, or other remaining general stores, and determining how they continue to survive and what is it that continues to attract people to such stores.  How do they determine what to carry and what not to?  Is there still a future for “general” stores in the world of supermarkets?

–Warren B. Causey

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Retailers Can Help Themselves With Veterans, Analyze It

I happen to be a U.S. veteran of Desert Shield and Storm in the Persian Gulf and a couple of “unofficial” activities elsewhere.  I’m retired from the U.S. Army Reserve.  I actually didn’t know until the last six months that there are some benefits of that status beyond the fairly limited ones provided by the federal government, especially for a mostly part-time soldier who was only activated only for combat.

 

When I moved to a different home last year that needed a lot of renovation, I found myself spending a lot of time and money at Home Depot.  I was taking a trip there one day with a friend, also a veteran, who was helping me with a project and he told me to be sure I got my “veteran’s discount”.  I didn’t know anything about a discount and he told me to show proof of my veteran status—which is printed on my driver’s license—at checkout and I would get a 10% discount.  I tried it and it worked.  Since then, I’ve obviously been a faithful customer of Home Depot.

Desert Storm Veterans

Desert Storm Veterans

I really haven’t checked any other places to see if similar discounts are offered veterans elsewhere, but if they aren’t, they should be; not only does it help the veteran, it also help’s the businesses.  When I need anything for the home these days, my pickup is on autopilot, it heads straight for Home Depot where I know my status will be rewarded.  We veterans may not be a major demographic, but a little advanced analytics work probably would find it’s worth the businesses’ while to develop some loyalty.  While that 10%, before tax, might cut into the profit margin a bit, it could also certainly help with volume (especially with as many troops as we have abroad and in combat these days), not to mention good-will.  It’s worth doing some analytics, I think.

–Warren B. Causey

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BYOD Is Something Retailers Should Consider

BYOD—Bring Your Own Device—is part of the technology revolution that major companies; such as utilities, transportation firms, high-tech companies and global giants; have to deal with.  With the increasing capacity of small hand-held computers, and even cell phones that act like computers, companies are having to decide if, when and how these devices that employees and customers bring with them are allowed to access the company’s computer systems.  Retailers can’t ignore the issue either, in fact they very well might be on the front lines!

Bring Your Own Device

Bring Your Own Device

I’m probably a fairly typical older-generation technology user, but even I now usually research a purchase on-line before I go to a store.  Younger people are even more wedded to their devices.  I’ll comparison shop online before I even drive to a store.  Once I get there, I’ll also frequently access the information I found before I went to ensure I know what I’m looking for, at what price.  That puts me on-premises with my own device.  Sure, I probably can’t access the store’s internal systems, but there are circumstances when it could be useful if I could, especially if the store wants to make a sale.  If I can’t find something, I usually have to find a clerk who isn’t busy who then checks a hand-held device to determine if there are any in stock and where they’re located.  I could do that for myself, if allowed to.

 

Retailers would be well-advised to do some analytical work around the BYOD issue.  Hand-helds and cell phones aren’t going away and they’re already ubiquitous, and companies need to consider what is behind the firewall and what isn’t and decide analytically what the best options are to deal with this brave new world.

-Warren B. Causey

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‘Market Fairness Act’ Also Analytics Full-Employment Act

The analytics departments of major Internet retailers and other firms that sell across state lines via e-commerce just got a major new tasking.  The new act requires those firms to collect sales taxes on such transactions.

Aside from the fact that state governments probably need to be reigned in rather than given more money to play with, meeting the collection and dispersal requirements are going to be a nightmare.  Many states allow local option sales taxes, which means rates vary by city and county across the country, as well as state rates also varying widely.

 

All this is doable for the retailers, but it is complex and will keep analysts busy for quite a while getting the new rates input into their systems.  It’s fortunate that many of them will have business intelligence and advanced analytics systems to help; those who don’t may be in for a bit of a nightmare.  But what else is new when dealing with governments?

–Warren B. Causey

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