We are data driven – Oh no you’re not!

By Alan Morris, Chairman, Clekt

We are approaching that time of year when theatres across the land should be preparing to stage their annual Christmas pantomime; although not this year, as we all know, this year is ‘cancelled’. 

The different tales of enduring hardship and menace, where everyone lives happily ever, are a mixture of wishful thinking, magic, and where the impossible becomes the reality. 

Every retailer could do with some magic right now; times are tough. The sector is impacted by constant, unrelenting, and more recently, unpredictable change. How wonderful would it be if someone appeared from nowhere, banged a magic gong, rubbed a magic lantern, granted every retailer three wishes, and the sector lived happily ever after? 

Right now, there is no time for consolidation, there are no safe harbours, and a course to provide safe passage has yet to be chartered. As a retailer, if you are not going forwards, then you are going backwards, and given the financial leverage that most companies have hanging over them, that is not a sustainable option.

The one thing I have always loved about retailers is their resilience. Even when times are tough, there is the belief that “next week will be better”. But in my 30 plus years of working with companies in this space, I have never been sure why they think that this will be the case, as in most instances the promise of better times ahead, has no more grounding in fact than someone’s previous experience. 

Given where the sector is today, is someone’s past experience going to provide the insights needed to ensure future success? It’s time for retailers to use their most valuable, and underused asset, data. When you consider how much data a retailer collects and keeps, it is staggering to learn that 73% of it goes unused. 

Surely, given the technologies available today, and the apparent advantages deployment can bring, you would think that every last element of data would be used to glean insights that will increase customer engagement and optimise business performance. But in reality, retail decision making is only led by data, it’s not driven by it. 

Too many retailers are using terms like data culture as nothing more than a slogan in their business, and unless they change their position quickly, they will lose more and more ground in the digital transformation race.  

There are some who think that ‘data led’ and ‘data driven’ are the same, but they are very different. Think about when your car sat nav tells you to “turn right”. It is advising you based upon your route preferences and the mass of data it has available, but the decision to turn the wheel is yours. 

“Too many retailers are using terms like data culture as nothing more than a slogan in their business, and unless they change their position quickly, they will lose more and more ground in the digital transformation race”

If you think the sat nav is wrong, you will ignore it. If 100 yards further down the road you sit in a traffic jam, then you will have wished you’d let the sat nav do its thing. 

After all, the sat nav is using live traffic data as insight to drive its decision making, whilst you are just using your own judgment, which is based upon gut feel, experience and often, contains bias. Just because you went that way once and it took longer, doesn’t always mean it’s the wrong way to go every time. 

When analysing data, we should start with the business objectives we want to achieve rather than a list of questions we want to find answers to. The latter steers us towards findings that will only support our prepositioned viewpoint. 

We now have the capability to process millions of simultaneous calculations exploring relationships between every entity of data we hold. We can analyse links between different transactions, the impact of variables, and how these affect outcomes. 

Regardless of how unlikely the human brain might consider some of these connections to be, no stone is left unturned and nothing is left to chance. This is how we find insights; insight is not gained from ‘Best Seller’, ‘Top Customer’ or ‘Stock Cover’ information, it comes when you learn something new that will make a big difference to how you think and act in the future. 

Analysing data in this way is a big step forward for retailers, but an even bigger progression is to allow the insight gleaned to become directly actioned; this is the world of AI where we replace human thinking with machine thinking. No more opinions or gut feel, just definite actions based on fact that will make changes to how you do business: this is what being data driven means.

Can you imagine a time when your voice activated AI is the brightest, most experienced, and most valuable member of your team? The days of business not being data driven will soon be “behind you” and only those that release the potential, and seize the opportunity, will thrive.