Top retailers focus more on data
Nearly 60% of global "brand leaders," including traditional retail, pure-play, consumer goods and branded manufacturing companies, told Deloitte Digital researchers that their value proposition is based on product quality or uniqueness — compared to 11% for price and 6% for convenience, according to survey of 500 companies worldwide. Just 10% identified values and emotional connection as their unique pitch to customers, according to the report.
Those surveyed reporting a revenue increase of at least 10% in their most recent fiscal year, focused, on average, on data almost twice as much as "underperformers." The most common data deficiencies were governance (68% don't have effective consumer data management plans); agility (63% don't respond effectively to consumer demands and insights); and security (54% don't employ rigorous compliance and security to monitor and protect consumer data).
A majority (65%) of branded manufacturers have little to no access to consumer data from indirect channels, like marketplaces or wholesale channels, the researchers also found. Deloitte Digital found high level interest in adopting unified commerce platform to address that: 52% of C-level executives say they plan to replace existing systems with a single platform, compared to 30% of SVPs and VPs, 20% of senior directors and directors, and 21% of senior managers and managers, according to the report.
Deloitte Digital reaches a range of conclusions from all its number crunching, but ultimately it comes down to this: retailers and brands interpreting a wide breadth of data are faring better than those that continue to see separate channels, in part because they're better connected to their customers.
"These numbers show that brands are stuck on product differentiation," according to the report. "This can be relevant when offering luxury goods, but for those feeling competitive pressure from online marketplaces, product commoditization, and new business models, it's time to add service and convenience into the equation — offering a more holistic consumer experience in the process."
The researchers argue retailers' tech focus needs to expand even beyond the idea of unified commerce, which centers on inventory and transaction efficiency, and move toward unified engagement, which focuses on the consumer and interactions.
Product differentiation can hurt retailers that skip over customer engagement, Deloitte Digital researchers argue. But unified commerce systems can also help retailers decide what to have in their inventory and localize their inventory and store experience. That's seen at retailers like the New England record store chain Bull Moose, which employs a unified commerce platform to ensure that data from sales and search is useful in planning what and how much is available to its customers.
"That's where art and science get to work together," Michael Stefanakos, VP of lean retail partnerships at retail software company FieldStack (the unified commerce platform that Bull Moose's founder developed), told Retail Dive in an interview. " Fieldstack says that if someone comes in to a store and special orders, it's highly likely based on that purchase history that other people are likely to purchase that as well. Then automation takes over based on sales velocity. And because of a robust loyalty program, whether you log in on your phone or computer entire we can help drive inventory based on those stores."
But several of the brands surveyed by Deloitte Digital say they maintain an average of 39 "disparate front-end systems to manage consumer engagement," including point-of-sale, mobile, call center, e-commerce, email marketing, social and content management. "That's a lot of open tabs and potential for crossed wires," according to the report.
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