How Human Intelligence Delivers a Competitive Edge in Retail Data
TL;DR
In retail, managing, collecting, and accessing large amounts of data can lead to success or expose gaps in a brand’s systems and operations
Data democratization empowers teams to make better decisions with the data they have access to
Democratizing data delivers many advantages to retail teams, from improved flexibility to decreased bottlenecks, and encouraging innovation
The right governance and guardrails must be in place to prevent teams from compromising sensitive data and avoiding misinterpretation or misuse
Understanding the shopper’s path is important to improving customer experience
Human intelligence is the secret weapon retail needs to succeed
Photo credit: Photo by Stephen Dawson on Unsplash
Picture this for a second. You’re checking your social media feed and see the preview of a highly anticipated movie you’ve been meaning to watch. A few seconds into the preview, your excitement turns to utter disappointment as you discover that the clip was produced using low-effort AI tactics, including a widely loathed cheap text-to-chat voiceover.
This was actually the case with a recent promotion Paramount Pictures ran for the promotion of its film Novocaine. Believe us when we say that the fans were not amused. The online backlash was massive, and many criticized Paramount for using “AI slop” to promote its content.
This case is one of many examples where even in a competitive vertical such as retail, human intervention is not only appreciated, but also necessary to understand exactly what consumers want.
In the retail ecosystem, managing, collecting, and accessing large amounts of data can literally make or break teams. It can lead to incredible success or expose gaps in a brand’s systems and operations. The key lies in leveraging data in the right way.
Brent Dykes, Data Strategy Consultant and Author, describes it aptly, “The skill of data storytelling is removing the noise and focusing people’s attention on the key insights.”
Let’s look at how data can influence or hinder retail teams, and why human intelligence is an important component to retail success.
“The skill of data storytelling is removing the noise and focusing people’s attention on the key insights.”
Brent Dykes, Data Strategy Consultant and Author
(Source: Brent Dykes)
The Power of Data Democratization
In recent years, top-performing retailers have focused on the importance of data democratization and how to make data more readily accessible.
So, what is it and how does it help teams improve?
Data democratization is an ongoing process that empowers employees within an organization to make better decisions comfortably by leveraging the data at their disposal.
Retail brands that are keen on data democratization should follow these steps:
Empower employees who are curious about data
Be equipped with the right tools to use data
Shift the internal company culture to understand that data democratization is a continuous work in progress
Data democratization also delivers several powerful advantages to retail teams:
Improves flexibility: Rapidly adjusting to market shifts through data-powered decisions.
Team empowerment: Provides insights required by top-performing teams to deliver successful initiatives.
Bolsters coordination: Eliminates internal silos and promotes more internal collaboration.
Minimizes bottlenecks: Decreases a team’s dependence on data specialists for routine work, enabling the specialists to focus on more complicated tasks.
Encourages innovation: When supported by real data, teams can experiment and generate ideas that improve performance.
By proactively dealing with these challenges, data democratization creates a retail environment where teams become accustomed to making data-driven decisions, leading to innovation in problem solving, and outmaneuvering the competition.
Data Democratization: The process of making data accessible and usable to all authorized users within an organization, empowering them to make informed, data-driven decisions without relying solely on IT or data specialists.
(Source: Alation)
More Data = Higher Risk
While having all this data available sounds incredibly advantageous, it can also lead to some very challenging situations if not handled properly.
Here are some of the key data challenges faced by retail teams:
Security and privacy risks: The risk of data security and privacy increases significantly when more people can access it. This could lead to greater vulnerabilities such as data breaches, leaks, or other types of threats.
Data quality and consistency: Not only do you need everyone to trust the data, but you must also ensure the data is accurate and originates from a single source of truth.
Low data literacy: Teams must be data literate for true data democratization to be implemented successfully. Without this, the data can’t be used to make better decisions.
Data silos and integration: When not governed properly, users run the risk of storing or accessing data in unsecured locations, resulting in lost or damaged data.
Misinterpretation and misuse: Guardrails must be in place to prevent unauthorized access or mishandling of data. Gatekeepers must monitor activities to avoid any misinterpretation by users that could result in presenting inaccurate conclusions.
High implementation costs: There are many expenses associated with the implementation of data democratization that must be set up and managed carefully to protect sensitive data.
Remember that with data democratization, retail teams are pulling data from different sources and directions. With the proper governance in place, they mitigate potential risks and accurately guide decision making.
Understanding the Customer Journey is Vital to Improving CX
The secret to connecting all the retail data "dots" is having a deep understanding of the customer journey. This includes the point-of-sale (POS), customer relationship management (CRM), inventory systems, and online customer behavior.
Analyzing the customer journey also enables retail teams to map out what consumers do across the different stages, from discovery to purchase.
Not only does this unify fragmented data that reduces silos, but it helps teams understand the motivation behind purchasing decisions and translate metrics into actionable intelligence. It also helps retailers address issues rapidly, increase customer satisfaction, enhance loyalty, and could result in a 10-15% rise in sales.
Here are some of the ways they can achieve that:
Profile unification: Retail teams can “follow the breadcrumbs” between in-store browsing, a curbside pickup, a digital browse, or the usage of a loyalty card.
Context: Learning more about the shoppers’ path reveals why consumers behave the way they do and help teams aggregate the data to provide a more holistic view of the customer.
Omnichannel intelligence: Merging different data sources into an integrated platform results in a single source of truth teams can use to fine-tune customer experience.
“While I think having a lot of data and technology is great, there’s nothing quite like having solid human intelligence to differentiate how retail teams are improving customer experience. Let’s bring the human back into retail!”
Why the Human Connection is Retail’s Greatest Advantage
While data democratization enables you to pull massive amounts of data from different sources and leverage AI to aggregate and analyze them, it’s the level of human intelligence that sets top-performing retail teams apart from the rest.
The retail data will only be actionable with a universal key, and that is the human perspective.
There are many reasons why human intelligence is vital for converting retail data into actionable insights:
Humans can deliver nuanced interpretation in an ecosystem where sole reliance on data lacks context.
It reinforces the “humanity premium,” a concept that helps retail environments feel intentional and where care is prioritized.
Humans can also bring intuition and creativity to the equation through data visualization, asking questions AI hasn’t considered, and uncovering insights that offer unique perspectives.
They can deliver more strategic responses that are customer-centric, intentional, and quantifiable.
Sephora is a great example of this. The beauty and personal care products giant integrated AI into their “Virtual Artist” tool so customers can try makeup virtually with the support of chatbot consultants. Through this, Sephora has improved and personalized the shopping experience.
While these are incredible features on their mobile app, Sephora hasn’t gotten rid of their human staff. In fact, in-store beauty consultants and video sessions are still required to create a truly exceptional experience for customers.
Here’s what retailers can learn from the Sephora example:
Leverage AI and technology (e.g., Apps) to understand consumers’ buying behaviors and preferences at scale
Ensure the experience is seamless online and offline
Get the team involved in the process of assisting customers and analyzing data collected at different touchpoints
Human Intelligence: The Universal Data Key for Retail Success
With all the data, technology, and AI that retail teams have at their disposal, incorporating the human element into their work is crucial. Ultimately, you’re dealing with people and working towards improving their shopping experience with you online and offline.
With the right governance, guardrails, and training in place, data democratization reduces internal silos and empowers your team to identify patterns, understand customer shopping behaviors, and make better decisions designed to create a seamless customer experience.
When retail teams understand who their shoppers really are, when and why they shop the way they do, and what motivates them, retailers can plan and implement strategically, resulting in improved performance.
To stay ahead and be more competitive, retail teams must find that balance between leveraging data, technology, and injecting the “human” into everything they do. The human approach is retail’s secret weapon, so let’s use it to improve the customer experience for everyone.
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