Rethinking The Brick-And-Mortar Domain Post-Pandemic With Data

By Katrina M. Conn, Teradata

COVID-19 upped the ante for brands to deliver great digital experiences as customers were forced to transact online. As a result, brick-and-mortar stores faced perhaps their largest reckoning since the 2008 fiscal crisis, with headlines predicting it to be the “death” of in-person retail as shoppers retreated inside their homes and turned to online shopping. Today, we know that while many businesses were hard hit and forced to close their doors – a reported 12,200 U.S. stores in 2020 – those that were fortunate enough to hold onto their physical retail spaces – are now gradually reopening to full capacity.

However, in the span of the past two years, what customers want their in-store experiences to look like has changed, presenting a new hurdle for business owners to overcome as they look to reach pre-pandemic foot traffic levels.

Going forward, in the immediate future and in the years to come, there will be specific segments and attributes within a store that must be treated differently if retailers wish to maintain a physical presence.

But what are they, and what are the indicators retailers should pay attention to? That’s where first-party data and advanced analytics come in, and here are three critical questions you should be asking to ensure the right path forward in re-envisioning your brick-and-mortar experience.

What Are You Doing To Drive The Loyalty Proposition Upfront In The Process?

This question should be woven into every aspect of the customer experience. Customers can be fickle shoppers, and their decisions are not always made solely on price. Sometimes their choices may be rooted in factors such as immediacy or geographic proximity, so retailers need to have a grip on all key decision-making factors. This also extends to building loyalty via experiential components.

Utilizing customer insights distilled from unified data sets across the entire business, CMOs can help to instill confidence, and critically, loyalty amongst their best customers. Tailored marketing approaches, and bespoke combinations of products, prices, and promotions available through their preferred channels, will encourage customers to continue to spend. Having a deep understanding of each customer’s behavior will help create personalized offers and communications that are relevant, and trusted. This is key to developing loyalty, especially during uncertain times.

Are You Trusting Data To Guide Decision-Making?

Trends are driven by consumer demand and the needs of conditions, as they should be. The fact that people want to go outside and have in-person experiences again indicates that there will still be a demand for richer in-store experiences and interactions. To meet these moments, brands must now think beyond pure physical expansion to understand the profile and attributions of customers and the demands associated with them.

As part of this journey, first-party data will become one of the most important assets for retailers and merchants as they reimagine their brick-and-mortar experience and aim to create a richer buying experience in the wake of shifting expectations from customers, and the deprecation of third-party cookies soon. First-party data can empower retailers with more informed insights to better grasp where to invest in those physical locations and forecast demand relative to what inventory – and how much of it – to stock.

The organizations of the future will rely on data sourced both internally and externally, not only to support an increasing number of queries but to also lay the foundation for real-time, hyper-personalized interactions as well as hyper-localized offerings for their customers, employees, partners, and even suppliers. In anticipation, retailers can begin preparing today to establish a clear plan for how they will apply data to serve customers consistently across all channels and define the steps they will take to deliver it.

How Are You Creating A Seamless Shopping Experience Across Every Channel?

Most retailers with a brick-and-mortar storefront also maintain an online presence. For these retailers, it is crucial to connect the digital with the physical to create a seamless experience whether you buy online or in-store to win the loyalty of customers, regardless of channel.

Retail leaders must connect their data analytics ecosystem across all functions and manage it as an integrated end-to-end process that is orchestrated to successfully digitize their businesses. For example, functions such as price and promotion and the supply chain are intimately connected. If we know that we do not have enough stock on hand to fulfill all the online orders that we anticipate over a busy holiday weekend, then we have some tough decisions to make. “Flexing” can help organizations manage demand for key items and therefore, avoiding inventory shortages and mitigating customer frustration.

Making intelligent recommendations about substitutions requires us to understand customer behaviors and preferences – and the ability to communicate them to customers in near real-time. We may want to fulfill orders for over-subscribed products not on a first-come-first-served basis, but rather by prioritizing orders from high-value customers.

To become a data-first organization, retailers can begin by reviewing their pre-pandemic models based on behavior and transactions compared to the new consumer behaviors now during the pandemic. They also need to use this new behavior to develop demand and inventory forecasting for today’s “new normal” demand and deploy these advanced analytic models that draw on customer data across their enterprise to forecast accuracy down to the store and SKU levels and drive real-time personalized insights. Automating decision making leads to faster and more informed choices that benefit the business and customers alike. By using AI and advanced analytics, retailers can predict and implement the most direct approach to minimize the “Cost to Serve” while fortifying customer service and experience.

By tapping into data assets to refocus and reorient their organizations around the customer, storefronts can become the base for retailers to evolve into the flexible, agile businesses required to compete on a now global, omni-channel scale.

Rethink The Brick-And-Mortar Customer Experience

Since March 2020, retailers have persisted in the face of volatile market changes, continuously changing customer behavior and demands, supply chain uncertainties, and new, emerging competition.

With so many organizations already running on lean operations and even leaner budgets, finding a balance between staying afloat and meeting customer demands – all while attempting to maintain a presence across multiple channels – is no simple feat.

Going forward, leaders across every department must make fast, informed decisions daily that are driven by data. Retailers of the future will need to optimize the fulfillment processes and streamline the customer experience using data and analytics, and cloud computing to modernize, reduce costs and improve efficiencies. Otherwise, the growth in online shopping and fulfillment may seriously impact their long-term profitability.

To keep pace with e-commerce as more customers are shopping online, retailers need to understand shoppers in greater detail based on new shopping behaviors and deploy more personalized, targeted in-store experiences and incentives. This means implementing a connected and detailed view of customers, stores, products, processes, assets, and people across the entire enterprise to orchestrate the business at hyperscale, and in real-time.

In the end, while brick-and-mortar will continue to live on, those that fail to evolve and rely on weak or incomplete data to drive their customer experience will ultimately seal their fate.