I’m occasionally asked, “do data-driven companies perform better than those companies who are not data-driven?” This article by Keboola that I stumbled upon a few days ago should provide you with the answer (which is a definitive yes).
According to the article, research from McKinsey shows that:
- Data-driven organizations are 23 times more likely to acquire customers.
- Businesses that use data increase their profit by 8%.
- 62% of retail businesses report that using information and analytics creates a competitive advantage for their organisation.
- One-third of industry professionals say the right technologies for data collection and analysis are essential for a better understanding of customers.
- Insight-driven businesses are growing at an average of 30% each year; by 2021, they are predicted to take $1.8 trillion annually from their less-informed industry competitors.
But how do these points translate to wholesalers and suppliers, especially now?
Right now, the mults are a serious challenge to our channel. But in the wake of the pandemic, we’ve already seen that customers are shopping differently. Knowing how shoppers are now shopping helps businesses attract or retain them.
The mults analyse every aspect of their operation, trying to find efficiencies and savings to reduce costs and thereby increase their profits. We don’t believe these types of conversations are going on within wholesale – or to the same extent. Data helps businesses reduce costs to increase margins.
One of the points made in Keboola’s piece was that 69% of businesses using data insights cited that they made better strategic decisions and 54% said that big data improved their control of operational processes.
There’s no doubting there’s serious, serious, competition in wholesale and retail right now. If we want to avoid a race to the bottom on price, using information and analytics to optimise revenues and margins via personalisation seems a prudent approach
Take Slevomat, one of the case studies used in the article. They’re continually growing and understanding their customers and rolling out offers for the right people at the right time, which is what enables their growth.However, they previously used Excel spreadsheets to manage their data. As the author points out, this left their team overwhelmed and their data in-actionable. When they introduced a data innovation platform, their data was infinitely more usable, enabling data-driven decisions which resulted in a sales increase of 23%.
I saw a post on LinkedIn recently (I can’t for the life of me remember who posted it) saying that businesses can’t save their way through this – they have to sell their way through it. For many, their main customer base is shut or operating at diminished capacity so this won’t work for the moment.
But for those who don’t have this issue, rather than consolidating and hoping for the best, they need to seek out new opportunities to sell products, gain customers, and keep them coming back.
Don’t overlook the importance of real insights
One of the main things we overlook is just how much digital, data, and real insights can help navigate these difficult times. From understanding the customer to creating a personalised experience, to predicting trends – and creating personalised pricing to optimise your margins and your customer share – you need information to achieve all of these.
The article made the point that many people are wary of fully embracing data because they’re not fully aware of the advantages of becoming data-driven. There’s also the worry of initial outlay, putting platforms in place, and training their teams.
However, as I pointed out in a recent piece (It’s time to get resistant to the impact of change), our industry is going to keep evolving, rapidly, and as recent events have shown us, sometimes that’s going to be completely out of our control.
One way to mitigate this is through data so the quicker we’re acquainted with the benefits, the better.