FEATURE
Retail in pandemic - can data analytics and market research facilitate ?
BY : TERENCE NG , TOFUGEAR
2020 had been a tough year for brands and retailers with lost sales and lost customers under a gloomy outlook . To fare ahead , they may not only require innovations and collaborations , but also consider how data analytics and research can help them become resilient and competitive in the market .
The importance of data analytics was acknowledged in the Philippines a couple of years back when Riz Oades , the Vice President and CEO of Rustan ’ s Coffee Corp ., Philippine-based licensee of Starbucks Coffee , saying that analytics had helped his company get a seamless flow of information which enabled managers to make informed decisions and chart the company ’ s growth . Couple of examples from the UK can also share insights how analytics may help brands and retailers .
One retailer example of gaining benefits from data analytics is exemplified by UK Specialist bed retailer Dreams , which leveraged software Exasol for analytics applications involving granular data such as ecommerce customer journey analytics . The use of Exasol enabled the company to run concurrent queries up to 8 times faster , and reduced query result time from minutes to just tens of seconds compared with when the company not leveraging analytics solutions .
Another interesting example illustrates how a FMCG brand assists local convenience retailers - Unilever in January 2021 re-launched its Partners for Growth category advice programme , which is based on national sales data , insight from Unilever category experts , and supported by practical insights from a panel of UK retailers designed to provide an enhanced support package for convenience retailers . There is also a Retailer Support section giving content to retailers on improving how they run businesses . Whilst the tangible sales impact towards convenience retailers is yet to be known , the data will surely be helpful for setting future merchandising directions for convenience retailers .
According to research from iPrice , online marketplaces in the Philippines are thriving during the pandemic , with more Filipinos using shopping apps due to social distancing measures in place . If brands and retailers are able to leverage data analytics solutions using data from such shopping apps or online marketplaces , they will know which categories tend to sell better and also what functions customers use more often .
Market research , in addition data , is instrumental to brands and retailers if they would like to learn more about the nature of competition they are facing , the profile of customers they are providing services to . In a nutshell , there are two major types of market research brands and retailers can make use of to improve their competitive edge , namely quantitative research and qualitative research .
Quantitative research makes use of online surveys , online journaling , social listening or structured panels . This type of research often utilizes a set of standardized questions with a numerical or agree level scale which can then be manipulated into generalizations and forecasts . For instance , in 2020 , Tofugear ’ s Digital Consumer in Asia 2020 is an online survey that spanned across 12 Asian market and gauged consumers ’ opinions on their shopping preferences and behaviours in a quantitative manner .
One brand notable for using quantitative research is Starbucks , which is known for innovative , on-trend coffee offerings and often uses quantitative data to expand their menu . One of the ways they stay on top of the market is through their My Starbucks Idea platform . This allows both customers and employees to submit ideas to the company . Starbucks used this digital feedback and monitored market trends before deciding to launch diary-free milk alternatives in the store .
Another major method , qualitative research , is often collected one-on-one or within small groups . It is an open structure and allows customers to describe their thoughts directly to another person and for the researcher to pose follow up questions to further explore specific topics of discussion . Examples of qualitative research include focus groups , in-depth personal interviews and secure video conferencing .
One brand notable for leverage qualitative research is Lego . In 2011 , the colorful brick company known for construction sets wanted to tap into a previously missed market and determined that qualitative data would help them get there . While boys around the world were LEGO fans , girls were not passionate about the brand . As such , Lego spent four years conducting qualitative research into how girls interacted with Lego products . This research included thousands of focus groups , observations , and interviews . After conducting this qualitative research , Lego used the information to create new product lines and sales soared 25 percent .
To conclude , data analytics and market research are viable ways that brands and retailers can consider to leverage to increase their understanding of products , consumers and ultimately increase their sales even during turbulent times .
ABOUT THE AUTHOR :
Terence is Retail Analyst at Hong Kong-based retail innovation company Tofugear . Over the last eight years he has worked at multiple market research firms , including Coresight , Nielsen and Ipsos , as well as at Hong Kong retail giant AS Watson . Terence started his career as Assistant Consultant in Cimigo .
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