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UK retailers are missing a data analytics trick as so-called Black Friday looms, according to research from data visualisation supplier Tableau.
Black Friday follows Thanksgiving Day in the United States and signals the start of the Christmas shopping period. This year it falls on 27 November.
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In 2014, shoppers spent £810m during Black Friday in the UK. Research sponsored by Tableau indicated that nearly one in four (24%) UK retailers are not using data effectively enough to optimise sales for what is expected to be the peak day in the shopping calendar.
The survey polled 200 senior retail decision makers about the role of data analytics in the retail industry ahead of Black Friday. The study revealed that retailers using data analytics to drive business decisions were three times more optimistic about a successful Black Friday in 2015 than those with little to no use of data analytics.
At a discussion held to coincide with the publication of the research, Cantor Fitzgerald consumer research managing director Mike Dennis talked about the state of play, as he saw it, with respect to British retailers and their use of data analytics.
“Smaller companies that are growing fast from a small base have rarely invested in the best IT systems to begin with, and they don’t have the quantum of profit required to make that investment. If they are in a niche market they feel they know their customers anyway,” he said.
“The big ones are not using data the way you might think, on the customer side. They are more using data to help in their negotiations with their suppliers to bring down the cost of goods sold.”
Read more about retail data analytics
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- In the US, the holiday shopping season is the most important time of the year for retailers, and they're increasingly turning to data analytics to get an advantage over their competition
- Retail analytics expert Emmett Cox explores the challenges of “big data” and provides tips for businesses to make use of the information they’ve collected
Kieran Healey-Ryder, head of customer relationship marketing at Wiggle, an online sporting goods retailer and Tableau customer, said his company’s use of data analytics was, on the contrary, “very much a customer-focused, marketing-led initiative”.
“Big data presents a fantastic opportunity to retailers to engage with customers with relevant content. That said, not all data is born equal. The risk is that you invest in data too vast to make a meaningful action. With landmark retail events such as Black Friday you cannot afford to do that,” he said.
“Data visualisation is essential to learn quickly from disparate data sources without substantial tech resource and investment.”
As for Tableau itself, added Healey-Ryder, its use means “we can avoid Excel and I can run a team of three, not 43, supporting 140 people across the business”.
Kam Rai, head of analytics and business intelligence at Momondo Group – which includes Cheapflights, a flights information company that sells leads to websites such as Expedia and those of airlines – said his company’s peak was less Black Friday than the “January blues” period.
Momondo also uses Tableau to make data digestible and to amplify the work of his 10 person analytics team, he explained.
“The digestibility is the biggest advantage. Otherwise you’d just be pushing out Excel reports, and the likes of BusinessObjects would not be cost-effective for us," said Rai. “The interactivity, lined up with top-level business key performance indicators on dashboards on our intranet is valuable.”