Jul 16, 2013
Retailers, CPGs Using Big Data Analytics to Outperform Others
Retailers and consumer packaged goods companies that are applying big data analytics to better understand consumers and adjust to their needs are outperforming their competitors who don’t, according to a pair of studies released today by IBM.
“These studies show that no matter where you sit in the retail ecosystem, big data can have tremendous impact on your success,” said Jay Henderson, strategy program director, IBM Smarter Commerce. “Leading retailers and consumer packaged goods suppliers are increasingly looking to the consumer to inform better business strategies. By using data analytics, these top performers are more in tune with retail trends that turn market opportunity into market leadership.”
The new IBM/Kantar Retail Global CPG Study of over 350 top CPG executives revealed that 74 percent of leading CPGs use data analytics to improve decision making in sales compared to just 37 percent of lower performing CPGs. By the same token, the new IBM study of 325 senior retail merchandising executives, conducted by IBM Center for Applied Insights in conjunction with Planet Retail, reports that 65 percent of leading retail merchandisers feel big data analytics is critical to their business compared to just 38 percent of other retail companies.
Both studies demonstrate how deploying advanced strategies such as big data analytics drives overall results for their companies. For example, the stock prices of top CPG organizations grew at a 60 percent higher rate than their laggard counterparts over the last three years. Similarly, the stock price of top retailers rose three times faster than the laggards.
The two independently developed studies also found that the top performing organizations of both CPG manufacturers and retailers share three common characteristics that manifest themselves in slightly different ways:
Increased focus on the end consumer: For CPG companies, this means merging marketing consumer data with the sales department’s retailer data for a more complete picture of the business. For retailers, this means more focus on what consumers want as opposed to focusing primarily on just the product itself.
Collaboration with stakeholders: With more focus on the consumer and more data to base their decisions, collaboration between retailers, CPG companies and their internal stakeholders will be critical to success. Leading retailers and CPG manufacturers collaborate well with each other and across departments internally, including between merchandising, marketing and IT within retailers, and sales, marketing and IT in CPG manufacturers.
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