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How data science is disrupting retail, commerce and therefore business.

2 October, 2018

Why aren’t we learning from the big retail collapses? From the early days of Blockbuster, Borders and HMV to ToysRUs, Maplin, Poundworld, House of Fraser and Homebase this year. A decade has passed and lessons still aren’t being learned.

Working for over twenty years in digital has shown me that what happens in retail and B2C over time happens in the B2B world too. So we all need to be learning from the many retail collapses.



All have been hit hard by the tech and digital revolution. None were ahead of the game with digital technology and digital science. They failed to capitalise on the opportunities in digital and quickly fell behind others who did.

And this isn’t about digital marketing nowadays. All the big retailers have Facebook pages, run email campaigns and use social media for customer service. (B2B are way behind on these btw!)

I’m talking about digital and technology full stop. Nowadays, it’s about buy-in to AI, automated machine learning, big data, software engineering: all of which can be summarised more broadly as data science.

Take the likes of Tesco Clubcard. They know exactly what you’re buying, and when you’re buying it. They can predict sales, they get to know you as an individual. They spend money on keeping customers rather than attracting new ones. (B2B are far behind on this, again!)

(At this point, thanks must go to Phil Winder from Winder Research for opening my eyes recently on data science.)


How is data science being used?

There are some fantastic examples…

Target’s pregnancy predictor

It has been suggested that Target’s $27bn revenue growth between 2002 and 2010 is due to cornering the baby-on-board market. The large US retailer used data to predict if someone was pregnant based on her spending habits. Then made sure they were the first place she buys baby products from, by offering vouchers and other incentives.

In one case, Target landed itself in trouble by spotting a teenager was pregnant before her own father knew. Of course, as this example highlights, you’ve got to be careful with data science, and consider morally and socially how you deal with that data and the intelligence it provides.


Walmat’s hurricane essentials – beer and poptarts!

Why does Walmart stock its stores with beer and poptarts before a hurricane? It might be assumed that customers would buy more water. But when the US giant began using predictive technology in 2004, data mining on sales from previous hurricanes showed that beer and poptarts are also stockpiled.


Amazon anticipatory shipping

Earlier this year, Amazon registered a patent for anticipatory shipping technology, which will allow them to send a product before you order it. Amazon is so sure they will get it right, they’ve said if they get it wrong, they will let you keep the product for free. (Actually, they will likely send products they predict you’re going to buy to a storage hold nearby – so it can be delivered in minutes or hours when requested.)

Scary, maybe? But imagine if a product you want arrives before you buy it… they have won the sale!


What are the benefits of a data science approach?

The beauty of digital, especially data science, is that it increases productivity, efficiency and profits. But another benefit is it removes the human touch. I don’t mean from where it’s important. I mean removing feelings and assumptions from business decisions. When making a decision based on data, you’ll achieve better and more consistent results.

Of course this only works if you have got good data. If you put rubbish in, you get rubbish out. So you’ve got to buy-in to digital and commit to getting the infrastructure right. You need to make sure you fully understand why you’re doing this, to ensure you’re putting good data in and getting meaningful data out.

The only way this is going to happen is by business leaders understanding the power of digital. If they don’t, they will just become another HMV.


So why don’t business leaders get digital?

Unfortunately in my experience, seven out of ten c-suite execs and board members still don’t have a clue when it comes to digital technology. They aren’t providing strong digital leadership and are in danger of getting left behind.


I’m therefore delighted to be speaking at the Next-Up conference in November. Next-Up is a membership platform that works with individuals leaving executive careers, helping them to refine their identity and skills and find new opportunities: to “shape their un-retirement”.

Next-Up was established by Victoria Tomlinson who is a BBC Expert woman on social media, business and education. She regularly speaks and blogs about the importance of boards understanding social media.

This is about giving experienced professionals the digital skills and confidence to ensure they push digital from the top down, not just the bottom up.

Is your organisation embracing digital? What are the main concerns or skills gaps around digital in your organisation? Could your board benefit from a digital skills refresh?

Click here to find out more about the Next-Up conference


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