Survey: Retailers not using consumer data to boost omnichannel shopping efforts

Chicago -- While retailers have collected years of customer data, only 9% are leveraging the information in a structured, usable way, according to HRC Advisory, a leading strategic retail advisory firm and unit of Hilco Global. The finding is part of HRC’s latest retail industry study, which found that outdated organizational structures and processes, non-integrated IT platforms and a lack of a clear roadmap are major barriers preventing customer data in enabling a retailer’s omnichannel efforts.



“Retailers are inundated with consumer data and research, but the reality is the vast majority are not able to effectively use it,” said Farla Efros, executive VP/COO of HRC Advisory. “Despite the impact of fast moving competitors like Amazon, more digitally savvy consumers and a volatile economy, many retailers are still planning and managing their businesses based on traditional brick and mortar practices.”



The survey also found that retailers aren’t operationally structured for omnichannel. Most retailers (87.2%) said they have taken initial steps toward or are planning to initiate an organizational change to better integrate processes across all purchase channels. But for 88.2% of retailers surveyed, e-commerce operations and marketing largely remain separate silos.



Other significant findings of the report include:



• Retailers aren’t leveraging customer data in a structured way. Only 9% of retailers studied are effectively leveraging their vast amounts of customer data in a structured way as part of their merchandise buying and planning processes. While 87.2% of retailers in the study plan to focus on more effectively using customer data to grow sales, but only 65.4% are actually in the very early stages of such efforts.



• Inventory isn’t being fulfilled effectively. 84.5% of retailers surveyed (across all sectors) said they are focused now or over the next 12 months on enabling new fulfillment options to avoid the lost sale. However, only 10% of retailers surveyed have the capabilities to effectively fulfill from store, which is a way for them to contain fulfillment and return costs, as well as avoid some markdowns.



• Retailers have not found the right balance between online exclusives and product available in all their channels. Less than half (42.5%) of the retailers surveyed said they had or were exploring “online exclusives” beyond color and size extensions to new categories and brands, while 66.2% of retailers are primarily focused on size and color extensions to address the realities of constrained brick and mortar space and slow inventory productivity.



Key additional findings:



• 78.2% of the retailers surveyed have efforts underway to clean up, organize and integrate various sources of customer data.

• 74.3% of the retailers have migrated to the same prices across all stores and channels.

• 45% of retailers are considering varying prices across channels and stores post initial markdown.

• Less than 15% of retailers have started to make the necessary changes to planning and forecasting processes to reflect the impact of new fulfillment capabilities.



“First and foremost, retailers need to recognize there has been a meaningful shift in power towards the consumer resulting from today’s numerous ways of purchasing and much increased price transparency,” Efros said. “In order to mitigate this shift and maintain market share, retailers need to adequately differentiate on the right combination of unique and/or exclusive products that are valued by the customer, while providing exceptional service and a compelling in-store experience that can’t be matched by newer pure play online competitors.”