“The retail landscape is littered with dash-boards bulging with data that is barely ever used”. So says, Dr Robert Rooderkerk, Associate Professor at the reputable Rotterdam School of Management, a top European school under the flag of Erasmus University.
Our colleague and friend, Thierry Coeman conducts an enlightening conversation with Dr Robert Rooderkerk. The retail expert wishes to point out that retailers and suppliers generally do not use their available data sufficiently – to gain competitive advantage from it. The daily mission of Dr. Robert is specifically to support retailers worldwide in their omnichannel operations on the one hand, and to advise them in making accurate decisions to turn their vision and strategy into constant growth, efficiency and profitability on the other.
The common thread during the interview does not immediately put the focus on data or analytics as such; rather the simplification, pragmatism and accessibility required to embrace business analytics.
“All too often, the crucial point where data is at the core of an issue, it initially identifies as a complex matter and appears to be only decipherable by a few mathematical thinkers in the organisation, when in fact these precise issues need to be identified and addressed by multiple decision-makers and across all departments in the organisation,” Dr. Robert says, “My first task in this challenging journey is to make ‘sometimes confusing terms’ immediately understandable to everyone. Take the term ‘Omnichannel’, for example. Usually, most people incorrectly translate it as retailing across and through all channels.
This is a misinterpretation. Efficient Omnichannel simply means making sure your offer is integrated in the best performing way in all channels according to the customer journey.
Freely translated, making sure your product is physically present and available everywhere (Route to Market), wherever the customer is; and above all, detecting all analytic pain points along those customer routes and solving them. This is apparently still where there are pinch points in some retail basics still not fully
and holistically mastered, including product availability, choice, zero queues, customer-orientated service and memorable store experience – both online and in physical retail. Too many retailers mistakingly apply an individual profit & loss calculation per channel, suggests Dr. Robert.
Make your DIY teams ‘Data Savvy’
Much retail data (loyalty cards, POS registration, in-store configurators, eCommerce) is still incomplete because it is scattered incoherently in different silos of the Omnichannel experience. The challenge is to tie data together harmoniously.
For this, one has to make the transition from data to analytics by structurally purifying and connecting data. Also, the term ‘Analytics’ should not scare individuals off. We must ensure that any expertise does not depend on some software programme, but rather on managers who can drive and motivate an organisation to leverage data, across all departments (Marketing, Sales, Logistics, HR) and not just those responsible for Information and Communications Technology (ICT) to generate continued growth.
Analytics should constantly focus on ‘what can be better applied from now on’, by business function and then from a holistic approach involving all strategic departments in the organisation. Analytics is simply the step forward after data input!
“Suppose, for a yet unknown reason, you realise, during the previous quarter, +12% sales in the sanitary category with bathroom/kitchen taps: with this, you have a fact base.
In our University methodology we call this phase, Descriptive Analytics (what is occurring). Then the research kicks in: why is this so?; what factors led to this? How does it effect the marketing mix (4 Ps)? What are the drivers for sales? Phase 2 is: Diagnosic Analytics (why did it happen?). The third, and decisive task, is to move from Descriptive / Diagnostic to Predictive: what model can help us estimate sales forecasts more accurately in the future? This is Forecast Analytics (what will happen).
For DIY & Garden, this can be very enlightening: which product categories are extremely sensitive to seasonal weather change and to seasonal turbulence? How should we forecast inventory, determine adapted product assortment choices and what type of new assortments apply?”, questions Dr Rooderkerk.
Smarter DIY
It seems that sometimes despite your perseverance, you still have to constantly fight against the bias or fear of using data? “Some people always seem to feel uncomfortable about using data. The truth is that technology inside retail is often introduced as a ‘gadget’, or nice to have; and thus not thought through.
Retail technology should not be introduced for technology’s sake. Think of robots or digital information pillars nowadays instore. Only when faced with a pain point in the process does it make sense to use technology as a problem solver. By deploying and using data smartly, it will benefit a smarter DIY”,
says Dr Robert.
The final objective must be to make the smartphone the beating heart within Omnichannel. Only then will retailing become ‘customer centric’, Just make it convenient.
Never waste a good crisis
Dr Robert`s mission is to offer data as a competitive advantage for every leader, manager and CEO in DIY retailing.” Effectively, data is not rocket science. Data can catalyse three levers in a business:
- generate more traffic on the shop floor
- achieve more product rotation through conversion
- and substantially increase the average check-out ticket (optimise the basket size),
Those who tomorrow start turning data into analytics in a smart way will immediately recoup the investment in sales and most importantly in profit.
To wrap it up in DIY terms:
- Data is the toolbox;
- Analytics is the satisfaction in finishing the job, when the project takes shape;
- Predictive is giving you the gusto to start the next job. “Once you have Descriptive / Diagnostic / and Predictive under control and by definition connect and master the Omnichannel, you are armed for the next challenge” he suggests.
Embrace Technology & DIY
Dr Robert Rooderkerk belongs to that rare breed of brilliant academics with an unparalleled chameleon ability: fine-tuning pure intelligence with observations and research in a retail environment. His academic work is constantly collected from observation and research on the store floor. That is why his thoughts and appeal have relevance, thanks in part to that pragmatic approach.
Recently, he published a high-profile article in Harvard Business Review that analyses the six ‘sticking points’ on why retailers appear reluctant to adopt Advanced Data Analytics. The article in question prompted this interview. So let’s just embrace the academic world in our industry.
Let’s be grateful for this new type and profile of smart advisers. As Dr Robert teaches us how to better understand the technical language, his journey will end up in making DIY smart again!
About Dr. Robert P. Rooderkerk
Robert Rooderkerk is the Academic Director of the Retail Analytics expert practice area at the Erasmus Centre for Data Analytics. He is an associate professor of operations management at the Rotterdam School of Management (RSM), Erasmus University. Over the past two decades, he has built up extensive expertise in retail operations, with an emphasis on omnichannel retail and retail analytics.
His interactions with retailers and manufacturers include DIY and Home Improvement. He is also a regular speaker at international industry and company events.
Thierry Coeman shares with us more than three decades of experience in the international Home Improvement Sector. He was the chairman of the Belgian DIY Association, a unique organisation which brought together retailers, independents and manufacturers much like Hardware Association Ireland. He works with a network of European and Worldwide Stakeholders to share best practice while seeking innovation in the art of facilitating the common interest focussing on customers’ needs. He is the author of the essay Hammertime, a provocative vision on the future of the Home Improvement store.
