Over recent months, we have had story after story of well-known high street brands failing. The news hit last month of BHS going into administration and then in the same week Austin Reed closed 70 stores … there are numerous factors in these companies failing, the newspapers are asking why, why, why?!
These are among the reasons for failure named in the press: -
- Geo-political – the Brexit result was unexpected, already affecting business. There have been short term effects, long term effects are yet to be seen. Who knows what effect Trumponomics will have?
- Economic – mass shifts in the national or international economy.
- Managerial – not taking into account market forces or changes in the market.
- Competition – disruptive businesses changing the competitive landscape. The AirBnB or Uber’s bringing innovative business models to the market.
- Social – not understanding social change.
- Marketing – omni-channel methodologies, using an individual consumer’s choice of marketing medium is increasing brand engagement and sales.
I would expect that some or all of these have had an effect on the High Street.
In the dozen or so high street brands Consolidata have engaged with, some businesses ignored these changes, others embraced them. One of our earlier clients, a High Street drinks retailer with a 100-year history, ignored the competitive changes that the supermarket chains were bringing and went bankrupt. The data warehouse we built could have supported the analysis required to understand the businesses change, but only descriptive analytics were performed, instead of predictive analytics.
I would contend that if these businesses were utilisers of data analytics, then these failures may not necessarily have happened!
A bold statement from a data scientist you might suggest … well yes, but the more successful businesses are utilising data in subtle (and no so subtle) ways that giving them the jump on their competitors. A few examples
- Southwest Airline improves customer interactions by speech analytics of phone calls to provide their staff with detailed information in advance of a discussion, to provide an improved customer experience and satisfaction.
- UPS ship 14 billion items every year. Their analytics processes, optimise routes, engine idle time, and predictive maintenance. Their program has saved the company over 85 million miles driven per year, 8.5 million gallons of fuel and 85,000 cubic tons of carbon emissions.
- Online education site, Skillsoft, uses a big data analytics solution to improve engagement by 128% of their 19 million users. They achieved this by analytics of content usage with improved recommendation suggestions.
These are some examples of businesses that have kept pace with technology and in an effort to engage better with their clients, have delved deeper into their real needs and wants. This has produced improved ways to engage with customers and a better understanding of the shifts in their client base over time.
Modern business, if they want to flourish in today’s competitive environment, needs to do a few things
- Delve into their data, understanding their customers, products/services, marketing, platform, delivery, etc. ... not what was, but what is now.
- Find appropriate ways to engage with their customer base.
- Make changes to the product/service mix – radical ones if necessary!
- Measure the effect of the change; do ‘AB testing’
- Repeat the process
Consolidata helped an online retailer to tailor their email marketing campaign so well – suggesting to individual customers at specific points in time, the next best product they may be interested in – that the uptake over the Christmas period outstripped the ability of the delivery system to keep up to date with.
Who knows, perhaps if the management of BHS or Austin Reed had used some of these techniques, theirs could have been the next success story, rather than be the next Barings of the High Street.