If you talk to retail industry stakeholders about their business priorities for 2015, you will likely hear about their continued focus on omnichannel. But the overall environment is starting to feel different than in years past. Words like “transformation” and “action” are being used to recap the 2014 business landscape. We’re moving past defining omnichannel and now focusing on implementation.
This new era is exciting because of what the consumer and technology have made possible. Consumers are sharing more clues about themselves every day through social streams, purchase history and search patterns. Technology is enabling retailers and brands to harness and leverage this data like never before.
In 2015, the retail industry will take more control of the customer-centric supply chain through predictive analytics. Retailers and brand owners will more fully utilize consumer-generated data, build a model for influencing consumer buying behavior and share that data with their key trading partners to gain the coveted single view of the consumer.
Predictive analytics essentially provides a crystal ball, allowing the retail sector to identify patterns that lead to innovative and personalized customer engagement strategies. By applying statistical modeling and data mining to study recent and historical data, predictive analytics allow for more accurate forecasting. This ultimately makes the consumer feel like retailers and brands know them, are working with them and are being helpful, not just selling to them. The amount of data being created each day is staggering, yet according to HRC Advisory, 91% of retailers do not effectively use consumer data to create an omnichannel shopping capability.
Adopting a more agile retail supply chain that is able to withstand and anticipate constant readjustments dictated by consumer data is a necessity for omnichannel success. While implementing plans for 2015, retailers and brands should keep in mind one of the most critical enablers of an effective customer-centric strategy: inventory visibility.
Implementing item-level RFID based on industry standards leads to precisely the kind of inventory visibility needed to know what’s available before leveraging predictive analytics. Some of the world’s leading retailers have already piloted successful programs using EPC-enabled RFID for replenishment items to increase inventory efficiencies.
They have successfully linked product information exchanged between trading partners to physical products traveling throughout the supply chain. Improving on the capabilities of the U.P.C. barcode, RFID allows for up to 99% inventory accuracy and more frequent, less manual readings to accommodate an omnichannel strategy. RFID helps the retailer understand “what do I have?” and “where is it located?” Want to move old inventory? RFID’s pinpoint accuracy lets a retailer sell every last item at higher margins regardless of channel.
The inventory visibility meshed with the insights and context gained from predictive analytics will ultimately advance the retail industry’s pursuit of a personalized consumer experience in the year ahead. Through more industry-wide collaboration to develop best practices for sharing consumer data, suppliers, retailers and brands can move forward to close the gap between consumer expectations and what the retail industry is actually capable of delivering.
Ultimately, predictive analytics offer retailers and brands the steering wheel again, making it possible to shape demand, deliver upon consumer needs and ultimately gain stronger consumer loyalty.
Melanie Nuce is VP of apparel and general merchandise at GS1 US.