The retail industry is well-known for being competitive. With constantly changing trends and customers increasingly demanding a seamless, omnichannel shopping experience, collecting and analyzing data from purchases is essential to maintain a competitive edge. Shopper panels and retail data are two of the most effective tools for boosting sales and retaining customer loyalty.
The most important aspect of gathering data on purchases is to decide the focus of the data. Retailers can gain insight into the purchasing trends of certain consumers through shopper panels, or they can collect data about the sales of products at a particular retail store or across an entire market. In many cases, retailers benefit from both kinds of data.
Shopper panel data focuses on information about the shopping habits of a specific demographic or household. Typically, this information is gathered when customers use loyalty cards or frequent shopper programs when making purchases. Shopper panels have the benefit of giving retailers a complete record of what a customer purchases over a long period of time. With this information, retailers can distribute targeted ads or print catalogues featuring the kind of items most often purchased by a customer rather than distributing the same costly marketing materials to all customers.
The major downside to shopper panels is that it is difficult to ascertain sales trends of a specific item, since purchases made without using a loyalty program are not reflected in the data. Additionally, this kind of data collection requires customers to sign up for and use some kind of loyalty program that allows a retailer to track their purchases. Often, retailers must offer an incentive, which can be costly. However, these kinds of customer loyalty marketing concepts can pay off, if done right.
In contrast, retail data focuses on the quantity and type of products sold rather than the shopping habits of specific customers. Retail data is commonly gathered through point-of-sale systems. This information is used to track the success of a particular store, or it can be narrowed to a certain time frame to assess the effectiveness of sales. Unlike shopper panels, retail data is not useful for market research, but it is very effective at addressing pricing and supply chain issues.
When it comes to retail data, retailers have the option to choose from two different data sources: retailer direct data and syndicated data. As the name suggests, retailer direct data only shows all of the products sold at a particular retailer. On the other hand, syndicated data is third-party data that shows how a wide array of products is selling across a certain market or geographic area and can provide information on the sales of competing retailers.
Ultimately, retailers can increase revenue by using a combination of shopper panels and retail data. However, the cost involved with gathering such data and the time required to sort and analyze the data presents a burden for small and mid-sized retailers. Carefully analyzing the pros and cons of retail data and shopper panels to choose a single data focus can result in a major boost to sales and more effective marketing.
Photo courtesy of Serge Bertasius Photography at FreeDigitalPhotos.net
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