The Data Analytics Landscape in 2022/2023
Data has been the lifeblood of industry for more years than we can count at this point. From the moment people first started keeping business records, data has been used in some capacity to guide business decisions and inform the direction of future retail.
However, few could argue that the concept of data has become a far more critical element of the business in recent years. Thanks to the inexorable onslaught of digital technology and the proliferation of the internet, data is now gathered in quantities far beyond anything those early pioneers could have imagined.
Naturally, as any system of operation becomes larger and more complex, the opportunities and challenges contained within also grow in sympathy. It is prudent therefore to, as we reach the closing weeks of 2022, to take stock of the current environment, so as to enter 2023 ready to make the most out of this vital resource.
A Competitive Edge
It may surprise you to learn that, according to Shopify, only 15% of retailers are currently using AI and smart analytics to drive their business decisions.
This means, if your brand is one of the 15%, you are already operating at a significant competitive advantage when compared to your less data mature peers. The more data you have available to you and if, through the use of automated technologies, the quicker and more consistently you can process that information, the more agile your organisation becomes. This leads to faster decision making, more intelligent input, and bigger and better outcomes.
"Retailers must operate accurately in real-time while taking just-in-time advice from disparate datasets arriving from collaboration points across their entire value chain,” says Hitachi Solutions. "The staggering number of channels adds to the difficulty of how to manage high volumes of fast-moving data in a cost-effective manner. Thankfully, there are ways to effectively employ data science to increase efficiencies and sales opportunities.”
Optimisation
We are now seeing data analytics being deployed to inform every part of the ecommerce experience – far beyond simply targeting advertising and personalisation (which we’ll cover in more detail in a future article in this series).
Website optimisation has become increasingly important when it comes to serving customers online. When visiting an ecommerce store, customers need to have a seamless experience which takes them smoothly through product search and discovery, to a checkout process which puts as few barriers between them and completing their purchase as is possible.
With data analytics from your website backend, you can discover how long this process takes, which parts of the journey are resulting in the most customers abandoning their carts and the process, and how effective your website is when it comes to locating specific items. With this information to hand, you can easily make improvements to problem areas and instantly see the results from future visitors.
Customers are fickler than ever and will not hesitate to abandon a slow or frustrating ecommerce experience.
Privacy and Security
It’s impossible to discuss the data landscape in 2022/2023 without touching on the issue of privacy and security. Data is a powerful tool for making business decisions, but it can also be a powerful weapon for cybercriminals.
"While privacy and ethical considerations are essential whenever companies use data (including artificial-intelligence and machine-learning applications), they often aren’t top of mind for some executives,” says McKinsey. "In our experience, business leaders are not intentionally pushing these thoughts away; it’s often just easier for them to focus on things they can "see”— the tools, technologies, and strategic objectives associated with data management—than on the seemingly invisible ways data management can go wrong.”
We are seeing government organisations implement increasingly draconian punitive measures in place to ensure companies are taking privacy seriously with enormous fines being dolled out to those which fall short of expectations. Across the world, legislators are cracking down hard on data reckless businesses and the damage to revenue and reputation resulting from a well-publicised breach can be irreparable.
Data Quality
As the volume of data grows, the need to ensure quality is maintained also increases. According to McKinsey, only 27% of some 1,000 respondents said that their data professionals actively check for skewed or biased data during data ingestion, and only 17% said that their companies have a dedicated data governance committee that includes risk and legal professionals.
The need to ensure data quality also becomes more important as analytics are increasingly handed over to automation such as AI. 30% of respondents said their companies recognized equity and fairness as relevant AI risks.
Final Thoughts
Data is going to continue to be incredibly important to the online retail business in 2023. Brands need to make sure they are leveraging it for maximum utility, prioritising privacy, security, and quality, and gaining the ultimate competitive advantage through AI and automation.
Data analytics are bound to be a hot topic at eTail UK 2023, being held in April, at the QEII Conference Centre, London, UK.
Download the agenda today for more information and insights.