More to follow
One of the initial barriers to online shopping was consumers’ reluctance to buy something without seeing it. Shoppers tended to research products online, then go to a physical store to examine them and make purchases. But as people have become more comfortable with e-commerce, and with smartphones enabling research and shopping on the go, a reversal in behavior is under way: Shoppers are going into physical stores to examine products, then using their mobile device to price-compare, frequently completing the purchase online.
It’s called “showrooming,” and more than a few shoppers are doing it. A 2011 Codex Group survey found that almost a quarter of respondents who bought a book online first saw it in a physical store. The Pew Research Center estimates that 5 percent of mobile phone owners who bought online in the 2011 holiday period did so from a physical store after comparing prices. In the U.K., almost a fifth of in-store shoppers check competitors’ websites on their mobile, with 30 percent of that cohort saying they’ve purchased from a rival while inside a store, according to Intersperience. And a ClickIQ study found that nearly half of participants who shopped online in the past six months had first seen the product in a store; some of them patronized that retailer’s e-commerce site, but almost half ended up buying from Amazon.
Amazon is eager to encourage showrooming. Its Price Check mobile app lets shoppers scan in-store products to easily look up Amazon’s prices. A one-day holiday promotion, offering up to $5 off for shoppers who used the app in a physical store, had brick-and-mortar retailers crying foul last year. They’re starting to fight back. In January, Target asked its suppliers to create products exclusive to the retailer, thwarting shoppers ready to compare prices online. Nordstrom, already known for its customer service, now offers free shipping for in-store shoppers.
The rules of retailing have changed. Showrooming already appears to be partly responsible for Best Buy’s current woes. For the most cost-conscious consumers, physical retailers will need to add more incentives (e.g., bonus products with in-store purchase). But while online retailers have the advantage of low overhead, brick-and-mortar offers immediate gratification, hands-on customer service and, in some cases, memorable experiences. Retailing as a Third Space, one of our 10 Trends for 2011, emphasized the need for retailers to create unique experiences and environments that are only partly about shopping. Ultimately, these could make the difference between a loyal customer and one with a wandering Web browser.
Image credit: Amazon
Thanks to jwtintelligence.com
Interested in slicing, dicing, measuring, and analyzing data for customer and business insights?
According to a recent survey by Bloomberg, 97% of companies with revenues of more than $100 million are using some form of business analytics, up from 90% just two years ago.
While businesses have embraced the idea of fact-based decision-making, a steep learning curve remains. Only one in four organizations believes its use of business analytics has been “very effective” in helping to make decisions. Data is not just ignored but often discarded in many organizations as the business users can’t figure out how to extract signal from data noise.
This is a far cry from the current hype around analytics and big data, raising the questions:
- How should an organization be structured to effectively leverage analytics?
- What skillset, mindset, toolset adjustments are needed to “think outside of the box”?
That may be fine at the outset, but in order to address the larger performance improvement issues, companies need to move up the maturity curve from repeatable to defined and then to managed and optimized.
The following are research insights highlighted by the survey sample of 930:
- Business analytics is still in the “emerging stage.” While analytics has gone mainstream, most organizations still rely on traditional technology. Spreadsheets are the number-one tool used for business analytics.
- Enterprises – small, mid, large, mega — have been collecting tons of data. They are dying to get more insights from it because it’s too much of a pain to extract anything from the databases.
- Organizations are proceeding cautiously in their adoption of analytics. Use of business analytics within companies has grown over the past year, but at a moderate rate. Analytics also tend to be used narrowly within departments or business units, not integrated across the organization.
- Intuition based on business experience is still the driving factor in decision-making. Analytics is used as part of the decision process at varying levels, depending on the organization.
- Companies are looking to analytics to solve big issues, with the primary focus on money: reducing costs, improving the bottom line, and managing risks.
- Data is the number-one challenge in the adoption or use of business analytics. Companies continue to struggle with data accuracy, consistency, and even access.
- Many organizations lack the proper analytical talent. Businesses that struggle with making good use of analytics often don’t know how to apply the results.
- Culture plays a critical role in the effective use of business analytics. Companies that have built an “analytics culture” are reaping the benefits of their analytics investments.
Nothing earth shattering here….Like all innovation, adoption will take time and require significant organizational changes across toolsets, skillsets and mindsets. But make no mistake, companies that don’t embrace analytics in a fast paced competitive environment will be left behind. Take for instance Financial Services industry. The sector continues to undergo massive structural change due to de-risking, ongoing regulatory changes (e.g. Dodd-Frank act, Basel 3), curbs on leverage, competition to cash-cows like credit-cards and a massive shift to online banking. This is driving skyrocketing demand for predictive models and creating an unprecedented need for data agility.
What Is Your “Analytics Maturity ”?
In order to change, you have to baseline first – what is your analytics maturity. The business analytics maturity curve represents the arc of progression every company moves along. Maturity levels are measured by your level of experience, the implementation and support strategies you use, and your degree of sophistication around data.
Analytics maturity can be assigned to one of the following four groups:
- Reactive businesses engage in business analytics only in a reactionary mode, e.g., by complying with a customer request or in response to competitive pressure.
- Responsive companies are engaging in business analytics, but mostly as separate, one-off projects.
- Proactive organizations have established processes, infrastructure, and resources to support business analytics in a programmatic manner.
- Aggressive companies aggressively expand analytics capability as an important growth opportunity and encourage their customers to adopt it.
Which type of organization do you belong to? Where do you want to be?
Notes and References
Source: Bloomberg Businessweek Research Services study, conducted among 930 businesses across the globe in various industries. Focus of the study is to provide insight into the current state of business analytics in today’s organizations. Also examine the challenges companies face when using analytics, and explore tactics favored by companies who have succeeded in using analytics more effectively than their peers.