As retailers & CPG’s look to escape the challenges of the COVID pandemic, they are running straight into renewed headwinds of a different nature. A not so perfect storm is upon us, with a combination of rapid inflationary and cost of living increases resulting in reduced customer spending power, coupled with soaring cost of goods and transportation fees driving up the overall cost of doing business. Someone must come up with the solutions, and with no-one wanting to cover the cost and/or margin hit, innovative solutions need to be found.
At the same time, there are a range of underlying changes to shoppers’ habits and expectations. The massive swing towards online sales, that was necessitated by lockdowns, is now correcting somewhat, while price sensitivity is very much front of mind again. For Chief Commercial Officers (CCO’s) these seesaw changes make getting the right product range in the right stores at the right price even more challenging. They all know that data is the answer; but getting the correct data, from every department across the business, to the people who need it in time to make confident decisions is challenging. Those that can though, will differentiate with product, pricing and customer service advantages, and thrive and benefit from the resurgence from lockdowns.
The role of the Chief Commercial Officer has always been a delicate balancing act. Offering each customer the range, prices and convenience they demand, whilst also driving volume growth, value growth and profitability for the business is never easy. Often during the pandemic, far reaching decisions had to be made extremely rapidly, and without truly reliable data. The decisions being made now are no less impactful. For example, as shoppers return to physical stores how should product range and availability, as well as promotions and delivery options, be rebalanced across online and offline. It is unlikely to return to an either-or choice; customers will want ‘and-and’ – all the benefits of online and mobile, plus the experience of in-store.
Christmas sales figures clearly suggested ‘and-and’ preferences among shoppers, with both online and physical store sales often complementing one another. Many retailers and CPG’s also saw growth in both ‘value’ lines and in ‘luxury’ items, as customers combined value-for-money with at-home treating after a difficult year. Similarly, fashion retailers are seeing consumers demanding a combination of fast-fashion, value for money and, increasingly, evidence of sustainable supply chains. A further complicating factor is added to the mix as hospitality, travel and entertainment venues re-open, and once again challenge retailers (grocery specifically, but also electronics and DIY/home furnishing) for share of wallet. All this at a time when disposable incomes are likely to be pressured by global inflation increases not seen for decades.
PREDICTING UNPREDICTABLE FUTURES
The word ‘unprecedented’ was probably over-used to describe the pandemic – but it may well be this period of unlocking that is unprecedented in terms of the challenges faced by retailers and CPG’s. Comparisons with performance of the last two years are now much harder to interpret, so CCO’s need now much better real-time data on actual performance and trends. They also need it at the most granular of levels – down to every individual store, product and customer. Data has always been vital to this role – but now the type of data and the way it needs to be handled requires transformation. Spreadsheets of historic performance and aggregated figures across stores or formats simply cannot provide the insights needed. Human-centric assessment can no longer handle the speed, volume or complexity of the analysis needed to understand performance minute by minute, product by product, store by store and customer by customer.
AUTOMATION AT SPEED AND SCALE
Advanced Analytics and automation are the only realistic solutions. Retailers and CPG’s need enterprise-wide data platforms that combine and make available granular data to support real-time analytics as table stakes. Only then are you in a position to have the flexibility and agility to constantly adapt to changes in external factors, customer behaviour and other elements such as supply chain disruptions. You can no longer afford to create plans based on incomplete data, information that isn’t 100% up to date, or insights that don’t factor in the impact on other parts of the business.
Leveraging the power of the Teradata data and analytics platform across your entire enterprise, CCO’s can dissolve artificial barriers between departments, geographies and products to become much more flexible to the rapidly changing customer and market dynamics. Instead of being prisoners of plans based on assumptions, they can become masters of decisions based on real time insights. To find out more about how Teradata can unlock the opportunities of post pandemic retail and CPG, please get in touch with our dedicated Retail & CPG team.