Retail, Analytics, and the Economic Crisis: Three Lessons Learned

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Click to learn more about author Julien Gautier.

Over the last
month, the business world has come to a standstill with organizations across
the business landscape scrambling to make sense of how to preserve revenue as
the world grapples with the economic downturn associated with COVID-19. This is
particularly true in one industry: retail.

The struggles retailers are facing have been reported far and wide. Retailers have been embracing several steps — such as enacting in-store social distancing measures and fortifying online shopping — in an effort to adapt as best as possible to this crisis. Nonetheless, several key questions have been raised in the retail industry. How could the response have been better? What can be done to prevent such damage to the business from happening in the future? And where does technology fit into all of this? As retailers are parsing through the fallout of this ongoing crisis, many are also examining how their technology strategies and processes could be improved.

With that in
mind, here are some of the key early lessons I believe retailers and their tech
teams can take away from the current economic crisis.

Enabling
Real-Time Transparency and Oversight

Today’s
technology solutions are incredibly intertwined. However, although they are so
interwoven, in many cases, they are managed by software environments and human
processes that are not made to communicate easily with each other. This
inhibits real-time oversight and coordination and can have far-reaching
consequences as a result. For example, in retail, this miscommunication can
result in everything from product shortages in key areas to unforeseen price
hikes on priority items — both of which have occurred during the COVID-19
outbreak. This has resulted in long-term customer dissatisfaction throughout
the retail industry. 

Retailers and
their tech teams have since become attuned to this communication problem and
are quickly setting out to make their technology more “friendly.” In addition,
real-time transparency has become a huge focal point for retailers as well, so
that if an anomaly occurs, it can be detected right away and addressed
accordingly.

Making
Foresight a Priority

Given how rapidly
things change in the retail business today, retailers are accustomed to having
to deal with disruptions. However, since the COVID-19 crisis in many regions
ramped up in a relatively short period of time, many were ill-prepared for such
a sudden, widespread business disruption. 

As a result,
retailers should take the time to examine how strong their foresight
capabilities actually are and take steps to strengthen themselves when it comes
to anticipating future scenarios. This means not only running more simulations
with more diverse scenarios but also how far into the future these simulations
can run. This will help retailers be better prepared to act under a much
greater range of circumstances. 

Embracing the
Human Element

Technology has fundamentally
transformed the way retailers do business. But one of the key takeaways this
crisis has provided retailers with is that they should not relinquish full
control to autonomous technologies. 

The
current pandemic has illuminated two key shortcomings of autonomous technology:
It is prone to errors when there is a rapid fluctuation in data, and it is not
always as good at coping with rapid changes as humans. Therefore, many
retailers are considering a more hybrid approach to their technology as a
result of COVID-19, whereby their advanced Data Science tools aim to empower
human operators, not replace them. 

Retailers are
still working hard to continue providing goods and services during this crisis,
but now is the time when the industry and its tech teams should start thinking
about how to transform the way they conduct business, to be more resilient
and better prepared to adapt their operations when the next crisis comes — whatever
shape it may take.

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