Data—it packs a punch. And not without reason. With an estimated 2.5 quintillion bytes of data generated every day in 2021, it is at the core of continued business growth. And enterprises are actively harnessing technology to make the most out of this data avalanche and generate insights to drive growth. The retail industry in the UK and Europe, too, is witnessing phenomenal data volumes, variety, and velocity and actively utilising data monetisation frameworks to shake things up and accelerate.
Intelligent retailers in Europe are proactively applying analytics to this data goldmine to sharpen their competitive edge, improve customer engagement and innovation, streamline supply chains, and eventually improve the bottom line and generate revenue from data intelligence. That said, retail c-suite and strategy leaders in the region still have a long way to go when it comes to tapping the full potential of the troves of data available to them.
Before we go any further, let’s pause and understand what really data monetisation is and how it is reimagining the retail industry. According to Gartner, data monetisation is the “process of using data to obtain quantifiable economic benefit. Internal or indirect methods include using data to make measurable business performance improvements and informed decisions. These external or direct methods include data sharing to gain beneficial terms or conditions from business partners, information bartering, selling data outright, or offering data products and services.”
Data monetisation is changing the retail business.
Retailers collect significant amounts of customer data through their customer and marketing programs which can be turned into profit sources. This is especially relevant given the pandemic-driven slowdown in retail and the growing competition from new age, digital retail platforms. Data can be leveraged both internally and externally to hike revenues by:
- Improving supplier insights and pricing
- Optimising distribution and logistics
- Providing marketing trends and information to third party providers
- Developing insight-driven products and services
According to Allied Market Research, the global data monetisation market is expected to touch $371 billion by 2023. The retail market will contribute to about 11% of this number, growing at a CAGR of 36% from 2016- to 2023. This growth in the data monetisation market is primarily driven by a continuous rise in enterprise data, technological advancements in big data and analytics solutions, and increased focus of organisations to generate new revenue streams, the report adds. That said, security and privacy concerns related to data monetisation solutions will hold back market growth.
To tap the market and harness the growth of cloud data, new markets and new players in this space, retailers must take stock of their data assets and create new revenue streams that can sustain growth. And data monetisation can be that lifeline retailers need right now. Retailers in the UK, Europe and the world over are actively tapping data monetisation capabilities to optimise data usage, enhance customer experience and loyalty, reduce operating expenses, increase profitability, maximise the value of products and services, and add insight and intelligence to planning and decision-making. Some ways they can harness data monetisation capabilities include:
- Integrating predictive analytics
- Strategising new revenue models
- Strategic marketing and geotargeting
- Improved business synchronisation
- Traffic and density planning
Why Data Monetisation is Essential for Retailers?
In the retail industry, a large number of players are looking to capitalise and monetise their massive datasets to boost revenue and productivity and optimise costs and asset usage. Technologies such as big data, predictive modelling, and geomarketing are enabling businesses to actively leverage data to identify new opportunities and enhance existing processes. For instance, data on customers’ purchase history, consumer behaviour, and other trends offer an excellent opportunity to evaluate current business practices, extract actionable insights, and expand their bottom line.
However, beyond the undeniable revenue benefits that accrue from data monetisation, a well-architected strategy can deliver benefits that have a more long-term impact.
Enhanced customer experience: Because data monetisation puts the customer first, it helps retailers get a better understanding of customer wants and needs— what the customer wants, when, why, and at what price point.
Improved transparency: Because both retailers and brands are looking at the same data sets, it can help enhance transparency and build trust.
Superior category management: Actions and business decisions based on data insights can ensure that products in a retail store align with customer expectations and wants in a given category.
Better impact of promotions: By harnessing data to make advertisements and discounts more relevant to customers, retailers can continuously assess the impact of a particular promotion and improvise or scrap it depending on performance.
Data Monetisation Use Cases are Reshaping Retail
Insights generated from data available to retailers make it possible to drive better revenues and profits. Given the advances in cloud computing, IoT, and data analytics, retail enterprises can harness data to generate more revenue. Here are use cases that resonate with retail CXOs
Omni-channel strategies with data and emerging tech: As more and more retail enterprises adopt cloud platforms to transform and scale, they proactively enhance their omnichannel retail analytics capabilities to unlock data-driven insights to optimise every area of their business. From improving supply chain efficiency to optimising inventory management, the massive data generated by today’s retail operations can play a crucial role in developing intelligent retail growth strategies.
Location-based analytics: By tapping into the power of where, retailers can offer contextual products and services to their customers, increasing the chances of conversion. For instance, retailers can leverage demographic data to stock more relevant products at their store in a given area—include more spices, turmeric, etc., in their grocery section of a store in an area dominated by the South Asian community.
What does it take to build a robust data monetisation function?
Developing a winning data monetisation strategy requires enhancing capabilities in data acquisition, data platform tools, data science activities, using data to address regulatory and compliance requirements, and staying clued in on customer needs while building a data-oriented decision management culture.
Data acquisition: Acquiring the right data at the right time and ensuring its availability to drive more informed business decisions is essential for retailers looking to increase revenue. This includes MDM and meta data management capabilities.
Data platform tools: It is vital for retailers to ensure that their digital assets have the right monetisation platform tools integrated to maximise revenues and expand the loyal customer base, for example, cloud, Hadoop, and edge servers.
Data science activities: This includes activities such as data exploration, build models, training and testing models, identifying insights, and data visualisation.
Understanding customer needs: Clear knowledge of customer behaviour helps enhance customer experience.
Data for compliance: Retailers can look to actively harness data insights to ensure regulatory compliance and address other concerns.
Building a data-oriented culture: To truly monetise data, retailers must be data-insights driven across all levels— from leadership to in-store employees. In addition, it is also vital to engage with a technology partner who has proven expertise in monetising data for the retail sector.
How can Xebia Help?
Xebia is at the heart of designing and implementing IT that continuously delivers insights and drives a direct impact on the bottom line. We have helped European retailers to become increasingly data-driven and harness that data for revenue generation. We do this by:
- Conducting comprehensive data maturity audits
- Ensuring Data & AI strategy development
- Driving tactical plans like a data product road map
- Training to guide you through your data journey
- Building your data science and data engineering framework
- Implementing the most effective workflow
- Facilitating fast, valuable and enriched digital transformations
If you would like to know more about how Xebia can help monetise and maximise your data, write to us at https://xebia.com/apac/about-us/contact/