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The role of data: 20 years in Consumer Goods & Retail6th April 2022
When we’re considering the evolution of Consumer Goods & Retail over the last 20 years, it’s arguably a lot to do with how data analysis has transformed the way suppliers and manufacturers source, supply and sell goods to consumers. Of course we can reference technology to discuss big changes in consumer behaviour; GPS devices in our pockets, listening devices in our kitchens and robots picking our groceries are the most obvious developments when considering innovation over the last two decades but none of this would have been possible without developments in how we track, store, process and use data. In this article we take a look at the world of data and the central role it has played in innovation across Consumer Goods & Retail over the last twenty years.
For Seven’s 20th birthday celebrations we have been speaking to former candidates and clients about their observations and experiences of Consumer Goods & Retail throughout their careers. This topic of data was particularly relevant in our conversation with James Mackenzie, Principle Consultant at The Data Shed and formerly of Asda, Tesco and Precima who has witnessed first-hand the emergence of real data as the central point for business development cross-sector;
“The word of retail is unrecognisable from the late 90’s, as is every other industry because data is now at the root of everything they do. Fundamentally, if you can understand the behaviours behind the outputs, you can influence strategy and the organisation”.
Glancing back pre-2002 for a moment, the launch of the Tesco Clubcard scheme in 1995 was the first large-scale adoption of data analysis by a retailer. It’s a move that drove not just loyalty – to the retailer and brands – but also a sense of membership and was the start of retailers influencing customer behaviour, rather than reacting to or capitalising on emerging trends, which was the natural state of retail planning before the 90’s. It also drove cross-category sales for Tesco as customers could spend points across petrol, banking, opticians and mobile as well as groceries. Although it started small, Clubcard scheme was behind the huge success of Tesco in the early 00’s, and it was all about effective use of data.
Back to 2002 and the birth of Seven, these developments in loyalty and membership were fast spreading across the retail world as Tesco’s competitors scrambled to make up for the loss of sales incurred. Since then more and more retailers and all of Seven’s clients have gradually put data at the heart of their decision making and planning. Ocado for example are a global leader in tech innovation with a model that allows every click and hover of the customer’s keyboard to be recorded and utilised to provide a slicker and more personalised user experience. James MacKenzie provides a helpful football metaphor for us here to illustrate the role that data plays in the development of a business strategy; “I always say data is the midfielder; it doesn’t score the goals or carry off the trophy. They’re the ones who pass the ball, for the other players to score. It’s a ‘fulcrum’ role; you help other people make better decisions. The more strategic you are, the better informed you are.”
Data and insights play a central role to the lives of many of Seven’s clients and candidates. Category Management, Commercial Planning and Marketing are all now insights-based disciplines and as leaders in Consumer Goods and Retail, our clients have a wealth of data at their disposal when setting out the strategy. Premier Food’s Category & Shopper Strategy Controller Farrah Mosaheb spoke to us about the role of data in Category Management;
“You do need to be able to see the wood for the trees with all the data and analysis that’s available. There’s a lot of interesting information out there but working with data is about pulling out key relevant insights rather than just presenting the data itself. My colleague gives the advice “Beware the intellectually fascinating” which is a helpful way of stressing the importance of focus.”
The consumer landscape only grows more competitive, so we can expect all brands to be adopting these strategies. Another giant in Consumer Goods and Seven client, General Mills announced a partnership with Google Cloud in 2021, enabling them to connect data from internal and external sources to drive personalisation, bring efficiencies to supply and demand planning, and increase reliability of service. Certainly this forensic focus on data has kept Ocado at the forefront of innovation in retail for many years; their robotics can complete 50,000 orders in 5 minutes, minimise food waste and control orders with suppliers all through data analytics.
High street giant Zara has a unique and highly successful business model that allows them to take their products from design through to stores in a record time frame, creating their ‘straight from catwalk’ feel. Zara utilises their sales and customer feedback data as soon as it’s received so that they can react in real time to customer demand, and they have complete control of their supply chain and data which puts them at the cutting edge of high street retail globally. We also can’t discuss data and innovation without mentioning Amazon. There’s always a lot to say about Amazon but for today let’s keep it at their innovative recommendation engine and how it accurately delivers personalised product recommendations by collecting data from user’s purchase and browsing history. This also crucially allows it to drive sales in less popular items. 35% of Amazon sales are generated through these recommendations.
Whether a business uses it as a resource, to drive decision making, or to power technology, data is at the heart of everything retailers and consumer goods brands do now. Where it was (and still is) the case that the customer is always right, retailers now also know everything the customer does along the path to purchase. Not only that, but they can influence those factors utilising their data too. We’ll finish this article with a final quote from James, “Without data, everything is opinion.”
And we all know what they say about those!
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