As detailed in PSFK & Microsoft's 2020 Retail Trends Playbook, these three key trends explain the benefits of investing in a data-rich infrastructure and how retailers can best implement it

To keep pace with heightened consumer expectations, retailers and their brands must first make key investments to improve their backend operations. That starts with a data-rich infrastructure that underpins their entire business, sophisticated analytics to extract meaningful insights and a cloud-based system for distributing them across the organization from supply chain partners to frontline staff. While this may seem daunting, retailers can also make major strides to deliver an exceptional customer experience by determining one area to refine and improve—without the risk of overhauling their entire operations.

With this foundation in place, organizations can define a successful model to improve their intelligent processes, while better positioning themselves to deliver an exceptional customer experience. PSFK’s Retail Trends Playbook 2020, made in partnership with Microsoft, makes the case for a data-first retail strategy. Here are three key trends drawn from the report that demonstrate the importance of building a data-powered operational framework:

Personalization Drives Sales
A clear benefit of data-driven retail is the ability to personalize the shopping experience, a strategy that has been proven successful: 80% of consumers are more likely to make a purchase when brands offer personalized experiences. AI-powered recommendations can keep consumers coming back for more after their first visit. According to a Salesforce report, 37% of shoppers who clicked a personalized recommendation during their first visit came back, compared to only 19% of shoppers who didn’t click a recommendation.

Investing in personalization software is also an investment for the future, where a customer-controlled retail industry is predicted to dominate. According to Kiran Mani, managing director of retail at Google, “Personalization is nothing but translating information into assistance. Over the next few years, $800 billion in sales will shift to e-retailers that use site personalization, and away from those that don’t.”

Data-Powered Warehouses Reduce Cost Of Ownership
As data becomes a seemingly infinite resource, management can prove expensive in both cost and time. It’s been proven that IT resilience in warehouse systems reduces total cost of ownership. According to Supply Chain Dive, Companies with fully integrated IT warehouses are outproducing non-integrators by 20%, mostly due to improved data access.

There is value in supply chain management for the company in both production and sales. According to Symphony Retail, 78% of all retail respondents reported that supply chain efficiency helped their company's performance. Similar manufacturers spend $100 billion annually on promotions versus only $300 million on shelf management, yet shelf management represents 66% of sales and 85% of profits.

Consumers Spend More With Better Service
Perhaps the most important intelligence regarding investments into more sophisticated, data-driven infrastructures is the direct relationship they have with customer spending. Consumers are willing to spend up to 16% more on products and services with companies that offer a better experience.

These consumers are in the majority. According to a poll from American Express, seven in ten U.S. consumers say they've spent more money to do business with a company that delivers great service.

The Retail Trends Playbook 2020 is a report by business intelligence platform PSFK in partnership with Microsoft that presents key trends, best-in-class examples and strategies for executing intelligent retail with the aid of data-driven technologies. Download the full free report here.


Lead photo: stock photos from WAYHOME studio/Shutterstock

To keep pace with heightened consumer expectations, retailers and their brands must first make key investments to improve their backend operations. That starts with a data-rich infrastructure that underpins their entire business, sophisticated analytics to extract meaningful insights and a cloud-based system for distributing them across the organization from supply chain partners to frontline staff. While this may seem daunting, retailers can also make major strides to deliver an exceptional customer experience by determining one area to refine and improve—without the risk of overhauling their entire operations.