This year, NRF’s 106th Annual Convention & EXPO hosted nearly 35,000 attendees, 510 exhibitors, and 300 speakers. With so much going on at Retail’s BIG Show, 360pi wanted to focus in on lessons learned for the future of retail analytics.
Much like 360pi’s Exhibitor Insights session, “Holiday Strategies Unwrapped: Lessons from Amazon, Walmart and Others,” many discussions at NRF aligned with the need to move beyond traditional strategies to next generation innovative solutions. In our most recent report, one of the most significant multi-year trends observed by 360pi is the continued shift away from a heavy reliance on direct price competition to a more encompassing competitive strategy that takes assortment, among other strategies, into account.
Four major topics of discussion around the future of retail analytics at NRF, as observed by 360pi, include:
- The Never-Ending Need to Grow Online Sales—But How?
Each year, more emphasis is put on the need to grow online sales. This past year, it was even more apparent. With the trend towards augmenting customer experiences, the convenience of online shopping played a large role in retail and will continue to do so. This past holiday, 360pi observed year-over-year increases in online sales on Thanksgiving, Black Friday, and Cyber Monday. Moreover, Black Friday generated $1.2 billion in sales from mobile devices and Cyber Monday broke online records yielding $3.45 billion in sales in one day.1
This trend has resulted in heavy ecommerce investments by major retailers as evidenced by Walmart’s $3.3 billion acquisition of Jet2 and Amazon entering the brand space with a growing number of private label offerings including apparel, electronics, household items, and more.3 With major retailers gaining traction in the online space, it’s time to ensure your online strategies are well in place to stay ahead of the game.
- Leveraging Category Insights to Boost Online Sales
As mentioned previously, one of the most significant multi-year trends observed by 360pi is the continued shift away from a heavy reliance of direct price competition to a more encompassing competitive strategy that takes assortment and other tactics into account. This includes taking advantage of exclusives and private labels, “Best Sellers” and other curated lists, and pricing in time.
In our 2016 Holiday Executive Intelligence Report, many observed trends revolved around category insights. For example, while it is not unusual to see a lot of price dynamism and price competition during the holidays, this past year retailers resorted to assortment tactics such as the increased use of exclusives in an effort to reduce direct price competition. When analyzing this year’s most sought after toy, Hatchimals, 360pi found that every major retailer was carrying their own exclusive strain to avoid direct competition.
- Pricing Intelligence is a “Must-Have”
While the shift away from direct price competition is apparent, the value of competitive price intelligence and dynamic pricing strategies is not something to be neglected. Your relative online price competitiveness at the SKU level either drives traffic to or from your store, whether it be physical or online. Target appears to have learned this the hard way this past holiday, electing to go with broad-based promotions and traditional doorbuster offers with their “10 Days of Deals” campaign, and now announcing softer-than-expected comparable sales.4
In addition, over the past four years 360pi has observed a shift to more “follow-the-leader” pricing, an extension of dynamic pricing, which Amazon is known to use extensively. Without dynamic pricing, it is very difficult to maintain a price competitive position at the individual SKU level without essentially being either underpriced or overpriced at any given moment. While Amazon continued to lead the use of this tactic relative to Walmart and Target this past holiday5, the latter two retailers did appear to double their own use of dynamic pricing year-over-year.
- Exploring New Avenues: Marketplaces
This holiday also marked the acceptance of the marketplace as a mainstream retail channel by retailers, brands, and shoppers alike. In fact, 360pi found that marketplace sellers accounted for 96.2% of all products offered on Amazon.com this holiday season. In addition, with Walmart’s acquisition of Jet.com, they join the ranks of other major marketplaces like Alibaba, eBay, and Rakuten.
Marketplaces offer a number of benefits including a cost-effective endless shelf for retailers, a less “conflict-laden” direct-to-consumer path for brands, and shoppers get the ability to buy items out-of-stock at traditional retailers, granted at a premium.
With the opportunities marketplaces present, we expect a growing reliance on and battles within the marketplace which will increase pressure on brands and retailers to monitor third-party sellers and shopper experiences.
With these major shifts in retail, 360pi’s next gen commerce analytics platform is more important than ever as retailers and brands have a growing need to access valuable insight to make smarter decisions faster—whether it be with category insight from retail and shopper big data to help you identify and onboard new categories and products, real-time competitive pricing intelligence to keep up with major retailers, and/or the ability to monitor and track third-party sellers.
Should you have any questions on our retail analytics, contact us and we’d be happy to continue the conversation.