If Next can’t call Christmas, who can?
Analysts worry about Next saying it can’t predict what will happen to sales over the Christmas period. “Week by week sales volatility makes it very hard to determine any underlying sales trend,” the clothing retailer said this week.
That’s not really good enough is it? Retailers like Next, which was for many years the bellwether for high street performance, have access to information that no one else has. I’m referring to the fingerprints left by customers over many years – transactions, prices, product mixes, promotion uptake, checkout abandonment, complaints, social shares. The list is literally endless. That data alone should be enough for Next to build a sensible Christmas plan; but combined with inputs including stock, inventory location, weather, macroeconomic data, they should have perfect insight into what demand is going to look like for the months ahead.
Retailers are now in the information business and they control a lot more of the knowledge than the Economist, the Financial Times and Deloitte combined. If only they spent more time looking at it and more time putting it to work. It’s crazy that five years after introducing the idea of big data, retailers are still ignoring their most valuable asset.
I understand the problem; there is no one person or department responsible for finding value in the data. Sure, everyone in the business is using the bits they need to make their case, to run their bit. But who’s in charge of data for the whole business, able to use insight to drive strategy?
The tech industry is doing its best to provide the tools to enable retailers to derive so-called actionable insights, but these often turn out not to be actionable once they meet the real world. Most retailers are operating tactically around data, notably the way they use it online and in store but almost never together. If they say they want to build a channel integrated business around the needs of the customer, then they need to start with the data.
But where to start? For less than a year, we thought that we were seeing the rise of the chief customer officer, but that never really took off, and I’m not sure why. Is having a CCO the whole answer? No, not at all, but at least there seemed to be a desire to start building retail by starting with demand rather than supply.
What we can say about Christmas is, like usual, it will be good for some and rubbish for others. The idea I want to spread is that Christmas, and other major peaks, are the ultimate test of whether a retailer has transformed itself enough to take advantage of the way people shop today. There’s no doubt that some retailers, in the face of Brexit, will simply keep their heads down, invest nothing and try to trade through. The smart ones will ignore Brexit, inflation, falling real wages, falling consumer confidence, GDPR, rising rents and rates, the Working Time Directive, needy staff and (did I forget any?) and keep focused on transforming themselves quickly enough for the retail landscape that is emerging.