The e-commerce push isn't enough - how should retailers apply data in the pandemic economy?

Our diginomica retail coverage is loaded with analysis on how retailers have responded to COVID-19 circumstances. One common theme: the omni-push - giving worried/fickle customers fluid choices. A digital commerce imperative? Fine - but you better have an app that lets customers easily toggle an array of delivery and pick up options.

The pandemic economy provided all retailers with an unsparing digital scorecard. The grades weren't stellar.

But as retailers press on, they run smack into hairy data problems. Beyond the obviousness of reducing BOPIS friction, and delivering a quality retail app - how do you sort your data architecture? What are the burning data issues retailers should be tackling? Can data inform a safer retail environment for workers and shoppers alike?

Those are the right questions for Guy Yehiav, VP and GM of Zebra Analytics at Zebra Technologies. When I first began talking with Yehiav about prescriptive analytics, he was the CEO of Profitect. After Profitect was acquired by Zebra in 2019, Yehiav expanded his scope. Basically, he has a bigger data platform to work with, and more tools as his disposable - including new COVID-19 applications for retailers.

Burning retail data questions

Retail's winners and losers are everywhere. Ergo, generalizations about the retail market are impossible (I didn't see Target's level of success coming). Why? Some retailers got ahead on the omni-channel push prior to the pandemic. Then there is managing demand - an issue retailers in the consumer goods area continue to grapple with. As Zebra informed me ahead of our call, the hoarding days are by no means behind us:

Based on a recent survey of Zebra Prescriptive Analytics (ZPA) customers, some companies are seeing daily sales increases of as much as 150% for the grocery, home improvement, and pharmacy/variety sectors of retail – largely driven by people stocking up for fear of having to self-quarantine for many weeks. Sales of pasta are up 170%, paper products +156%, and canned goods +154%.

That puts huge pressure on supply chain management. Zebra again:

Now is not the time to suffer a long-term supply disruption – customers need assurance that they can rely on the retail industry for the products they need.

And that's where retail analytics come in. Zebra says that effective retail analytics can identify patterns around inventory accuracy - and the impact of in-store pickup on SKUs that could go out of stock. Analytics can help solve per-store labor allocation, including curbside pickup demand surges.

Makes sense - but if effective analytics were easy, retailers wouldn't struggle with the predictive issues that flummox all the grocers in my area, even those with nifty online apps. "Retail analytics" can be a vast and unwieldy project. Quick wins are in order. So I asked Yehiav, where should a retailer start? He advises:

Look at how to increase inventory performance and accuracy, labor productivity and assortment effectiveness (i.e. making sure it aligns with customer expectations).

But while groceries may struggle with in-stock vs curbside vs delivery, at least they have the benefit of intense consumer demand. That's not the case across the board - take high fashion or luxury items. I asked Yehiav - any surprises amongst Zebra's customers? Yehiav responded:

One of our fashion customers closed all of its stores during the pandemic, which obviously caused its revenue to drop. But by using our solution, the customer strengthened its e-commerce business by improving labor productivity and inventory accuracy and performance. They recently had an earnings call in which they revealed that even with stores closed, their e-commerce business kept their bottom line intact, and revenue was holding relatively steady.

Obstacles to safe re-opening - can retail analytics help?

I asked Yehiav: what is the biggest concern retailers have about reopening stores? What is the best way to get shoppers feeling comfortable and safe inside stores again? 

Retailers are mostly concerned with whether the time is right to open stores (Will there be enough traffic? Can we sufficiently minimize risk?) versus the prospect of having to close them shortly after opening.

In terms of getting customers back in the stores, communication, trust and transparency are everything. Retailers need to be outspoken and public about the measures they've taken to keep their stores safe and sanitary. Customers need to trust their favorite retailers will tell them if a sick person was recently in their local store so they can take the proper precautions. Communication campaigns, floor markers to aid social distancing and traffic flow, and displaying the real-time number of people in a store are all effective measures. Compliance around COVID-19 safety and sanitation measures is also key.

When it comes to the nitty-gritty of running stores safely, Yehiav sees a role for analytics - combined with mobile alerts for employees.

Prescriptive analytics can send policy reminders and other training-related action directly to associates via enabled mobile devices. This technology-driven "on-the-job training" helps ensure associates do the right thing every time.

To that end, Zebra has produced a collection of COVID-related retail apps and dashboards. I ask Yehiav for a sample dashboard:

 

This is a screen of Zebra's ZPA COVID-19 Risk Assessment Dashboard. It provides a "store ranking by risk" tied in with the visuals. To compile this view, ZPA mashes up customer data with publicly available COVID-19 info. Yehiav:

We took Johns Hopkins COVID-19 data, which is available for free on their website. And we handed it over free of charge to our customers as well... We combined it with a Harvard Business Review document on how to identify the trend levels. When is it going from green to yellow, yellow to orange, orange to red, and vice versa? When is it going to be reopened to orange to yellow to green? And so we combined the data to get a risk-level trend by store.

Add the in-store data, and create a pattern of behavior, and a dashboard, to prepare the team for a closure, or for a reopening.

My take

These issues are no joke. Too many retailers are withholding important COVID-19 information from employees or customers - or not tracking that data properly. Yehiav told me an unsettling story about a store that had a few COVID-19 positive tests amongst employees. But the store's HR team told them not to say anything - contrary to the policy from headquarters. Instead of tracing the infections and informing customers, a very serious mistake was made, not to mention a breach in consumer/employee trust.

Yehiav's team wants to make sure that stores are diligent - and have the tools to make that diligence a reality.

Today, most of our customers are also using ZPA in order to push as soon as they get a COVID-19 positive. What is the protocol? How should we do it? The best way to manage the pandemic itself.

That's about as good an objective for retail analytics as I can think of. As retailers move from scrambling to react to COVID-19, now they have to figure out how to help us live with it. Analytics are tough for any number of reasons, from data quality to lack of historically-relevant data sets (see: Were supply chains exposed, or validated?). But this is the data conversation retailers need to be having.

End note: Zebra, which is never shy about acquisitions, completed the acquisition of workforce management vendor Reflexis in September. The integration of Reflexis will surely bolster their retail workforce offerings - a story to track.