Key takeaways from season two.

We’ve come to the end of season two of To Affinity & Beyond; our podcast about all things retail and consumer. We’ll be taking a break over the summer, whilst we plan a third season of forward-thinking content and inspiring guests. Watch this space!

In the meantime, here are our top three key takeaways from each episode:

Episode one: The state of retail in 2023 – part one.

At the start of the season, we examined six trends impacting retailers in 2023:

• Consumer champions really matter – especially when it comes to basic goods like milk, bread and loo roll. As consumers battle through the cost-of-living crisis, retailers need to make a choice: where can and can’t they pass on costs to consumers?
• More than 17,000 shops closed last year. Leveraging customer data effectively is the key to success – especially when it comes to creating customer experiences which tick the boxes for ease, speed and value.
• The retail media market is growing exponentially. Retailers who realise the value of first party data are seeing outsized benefits – Amazon’s ad business reported over $31 billion revenue in 2021.

Episode two: The state of retail in 2023 – part two.

The second episode continued exploring this year’s challenging retail landscape:

• Sustainability in retail is essential. Over the coming months and years, we’ll hear more and more about building a circular economy, reusing and renting, and the problem with planned obsolescence.
• Innovation isn’t an option when it comes to the high street, including department stores. Data is a retailer’s secret weapon – from analysing customer behaviour, to making sure stores are stocking the most compelling product assortments.
• Retailers have a lot of work to do to regain consumers’ trust when it comes to Black Friday. After years of misleading deals, forecasting demand and supply chains is vital for maximising margin, whilst delighting customers.

Episode three: Why is demand forecasting a huge opportunity for retailers?

Our most popular episode to date, episode three covered everything demand forecasting:

• AI-driven predictive forecasting can help retailers respond to unexpected changes in demand – quickly. Who remembers panic buying toilet paper in 2020?
• Ineffective demand forecasting hugely impacts profitability. If you’ve underestimated demand, you’ll lose out on sales. If you’ve overestimated demand, you’ll end up with too much stock in your warehouse.
• Great demand forecasts rely on customer data. Retailers need to understand customer need states and product availability, then serve this insight to decision makers.

Episode four: What is decision intelligence for retail?

Earlier this year, Alibaba named decision intelligence a top ten tech trend. In episode four, we demystified this fast-growing category:

• Decision intelligence (DI) combines data science and AI to power connected, customer-centric decision making.
• DI augments human decision-making, rather than replacing it entirely. From a retail point of view, it helps retailers make decisions across intrinsically interlinked areas, such as pricing, range, marketing, ecommerce and supply chain.
• Transactional data, product data, customer data and click data power DI.

Episode five: Why should I buy from you?

In a world of infinite choice, why should consumers buy from you? Episode five covered the importance of retailers’ value propositions:

• The once distributive role of retail has become more complex. Smartphones mean consumers have the world in their pockets and can quickly check online for better deals. It’s no longer enough for retailers to simply stock the products customers want to buy in store.
• Retailers operate in one or more archetypes – for example, a cycling shop curates the perfect range of products, whilst also providing expertise.
• Customers have countless alternatives – so retailers need to work out whether they shop with them because they deliver value, or because they haven’t (yet) realised there’s an alternative.

Episode six: From data to devotion – How to create loyal customers using analytics.

According to HubSpot, it costs between 5 and 25 times more to acquire new customers, rather than retaining existing ones. Episode six focused on the role of analytics in creating loyal customers.

• Loyalty is all about developing an ongoing relationship with consumers.
• Creating value is key. Rewards can be personalised to appeal to the right audiences and could be financial (e.g. a discount), emotional (e.g. a sneak peek) or convenience-based (e.g. early access to special events and sales).
• Loyalty data can inform product range, pricing and promotions decisions through a customer lens.

Episode seven: What’s the future of decision intelligence?

Episode seven took us back to HyperFinity’s roots. Dr Lorien Pratt, the co-inventor of DI, explained how this fast-growing technology trend came about:

• DI is “the discipline of turning actions into outcomes.”
• Many commercial decisions rely on minimal data, despite the rise of machine learning and AI. DI takes human decision making one step further – by wiring up complex data to business outcomes and actions.
• BI is backward looking, whereas DI is instructional – it helps guide decisions based on insight.

Episode eight: Why should data inform a retailer’s location?

Location, location, location doesn’t just apply to residential property hunting – it also dictates new retail store openings:

• Location planning decisions focus on three questions. Is the potential store near target customers? It is convenient for target customers to shop there? Does it meet operational requirements?
• Data on customers, geography, competitors and operational extremes feed into location planning decisions.
• Location planning also takes into account a store’s layout. Will it appeal to customers? Can consumers locate products quickly and easily? Is the shop visually recognisable as your brand?

It’s a wrap! Those were our key takeaways from season two of To Affinity & Beyond. Got a question about how decision intelligence can help your retail business? Contact us for a chat.