Today, every industry is data-driven. In The Data Behind, we dig into the data creating change in rapidly evolving industries. This month, we cover the role that data will play for supermarkets in the face of the COVID-19 pandemic.
Consumers around the world are rushing their local supermarkets. From cleaning materials and canned goods, to the dislocated demand for toil et paper, global supermarkets are responding to never-before-seen trends in consumer behavior. As British philosopher Bertrand Russel once said, “The longing for certainty is in every human mind.”
While consumers buy out stocks of goods in a quest to maintain certainty over where their next roll of toilet paper will come from, supermarkets and FMCGs are lauded for their relative immunity to economic recession and ease of maintaining business continuity. But during a crisis like COVID-19, a situation never before seen in modern history, supermarkets shouldn’t be leaning on historical market trends.
“In the midst of the COVID-19 pandemic, maintaining momentum is vital and the art of decision-making imperative,” says Evan Castle , Head of Market Intelligence and Strategy at Sisense. “From new regulations to fluctuations in demand and remote work, business leaders must face this new economic reality by addressing three distinct challenges with clarity: tracking rapidly changing circumstances, responding to volatility in both supply and demand, and maintaining a clear picture of business performance.”
Your data teams and analytic platforms will be key to navigating times of growing uncertainty . Below we explore the evolving needs of data and analytics through the lens of crisis management in the retail industry .
Tracking rapidly changing circumstances
Constantinos Mavrommatis is the Chief Data Scientist at RetailZoom , a consultancy that helps supermarkets in Cyprus unlock their data to reveal patterns and forecast future performance. As the crisis unfolds, he and his team are watching the retail industry’s response closely. And in a fast-moving environment, keeping an eye on changing circumstances is vital to managing your business through the evolution of the pandemic.
“We’re watching in real time as our clients’ use of dashboards is shifting,” says Constantinos. RetailZoom’s clients are equipped with dashboards that spot atypical behavior on a daily and weekly basis, but until February, usage of these dashboards was low. That’s the beauty of building analytics into your business continuity plan — when things start swinging outside of the ordinary, a well-modeled anomaly dashboard is key to ensuring a timely response.
Responding to volatility in both supply and demand
In the Cypriot supermarket sector, Constantinos and his team are tracking enormous shifts in supply and demand that are reflected in retail markets across the globe.
“One of the biggest changes we’re seeing, and will continue to see, is the shift from wholesale activity to the supermarket sector,” says Constantinos. “It is going to be vital for supermarket retailers and FMCG companies to leverage their data intelligently in order to maintain an adequate supply for their customers.”
FMCG companies typically see demand from both wholesalers and supermarket retailers, with wholesalers buying in bulk to supply large orders of cleaning supplies, coffee, and paper goods for offices filled with employees. On the other hand, supply to supermarkets is steady, with trends in consumer purchasing behavior emerging slowly over time. But that’s not the case today. Companies that produce these day-to-day goods will see wholesale demand plummet as offices across the world close down to contain the pandemic and see that same demand for those products shift to individual consumers in their local grocery stores.
Maintaining a clear picture of business performance
The shift from wholesale to retail, while one of the most immediate changes that retailers must track through solid data and analytics, is only one of a number of changes that retailers must consider to maintain a clear picture of business performance and continuity.
- The shift from eating out to eating in: In the face of an overwhelming health crisis, consumers are buying more food to prepare from the safety of their homes. But this is also one of the trends that will play out long term when the economy slides into recession. As unemployment rates soar, so too will the demand on supermarkets for fresh food to prepare at home. Supermarkets should plan for an increase in demand long after the pandemic is over.
- The hygiene sector: In times of crisis, consumer loyalty is fragile. If a consumer’s supermarket of choice is out of a product, and another market down the street consistently stocks these items, it’s not unlikely that the customer will begin to purchase at locations where they can do a “one-stop shop.” Now, more than ever, maintaining market share is critical for local supermarkets.
- Early overconsumption: At the beginning of a crisis, it’s typical to see a bit (or a lot) of overconsumption of certain products. For food products, this isn’t just hoarding behavior — with more food at home, people will eat more in the short term until a sense of balance returns. Supermarkets and FMCGs must, then, assume that this increase in demand is only temporary when responding with supply.
Supermarkets and FMCGs are better positioned than most industries to weather the economic storm that lies ahead. Those armed with a modern data strategy, clear KPIs, and well-modeled dashboards will navigate shifts in the market more smoothly than others. And the most successful retailers have their KPI dashboard locked and loaded for the unpredictable months ahead.
Spending her early career as a travel writer, Emily Arent found a home in Copenhagen and Denver before settling in Tel Aviv. She’s spent the last 8 years contributing to content programs at agencies and start-ups across Israel.
Originally posted at: https://www.sisense.com/blog/the-data-behind-retail-analytics-in-times-of-crisis/The post The Data Behind: Retail Analytics in Times of Crisis appeared first on AnalyticsWeek.