Randolph, N.J. -- Retailers are behind Amazon in analytics maturity, according to a new research report from EKN Research. Eighty percent of retailers say they are behind Amazon in analytics maturity, and 71% of retailers perform either basic analytics reporting or none at all – revealing retailers’ inability to take advantage of the data that is available to them.
The report, EKN’s 3rd Annual Analytics in Retail, show that while four in five retailers use enterprise-grade analytics, they cite analytics interpretation as their biggest challenge. (The study was sponsored by Manthan and SAS.”
“Retailers view analytics as extremely strategic, yet they currently struggle to derive commensurate value from their analytics investments,” said Gaurav Pant, senior VP Research and principal analyst, EKN. “However, there are significant opportunities for retailers that can harness the power of analytics. Retailers that can overlay their analytics capabilities with a strategy and organizational capability tightly linked with their business model will gain competitive advantage.”
Highlights of the report include:
• Retail spending on analytics is increasing. The retail industry’s average spending on analytics as a percentage of the total IT budget is set to increase from 14% (2013) to 23% (2017). With increased spending, retailers can begin to bring on skilled resources and systems that can help translate analytics data into strategic competitive differentiation.
• Retailers lack structure and ownership for analytics reporting: According to EKN’s data, 51% of surveyed retailers don’t have a formal analytics team, which creates data silos and inconsistency in reporting. Moreover, 42% have no single owner that is responsible for creating an analytics strategy and roadmap – further hindering retailers’ abilities in analytics.
• Retailers are focused on hindsight reporting. 70% of retailers are stuck in a hindsight-oriented reporting cycle; however, as the report indicates, a shift towards data/insight-driven decisions can have dramatic impact on efficiency and performance. The transition from hindsight- to foresight-oriented analytics reporting gives retailers a big opportunity to close the value realization gap.