{"id":37322,"date":"2018-06-19T08:39:49","date_gmt":"2018-06-19T15:39:49","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=37322"},"modified":"2025-06-02T05:15:37","modified_gmt":"2025-06-02T12:15:37","slug":"retailers-and-data-driven-commerce","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/retailers-and-data-driven-commerce","title":{"rendered":"How Data-Driven Commerce Is Driving Retail"},"author":501,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","transcript_file":"","podmotor_file_id":"","podmotor_episode_id":"","castos_file_data":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","_links_to":"","_links_to_target":""},"categories":[1001,791],"tags":[21242,281,1161],"department":[476822],"wherenext-category":[],"industry":[],"class_list":["post-37322","wherenext","type-wherenext","status-publish","format-standard","hentry","category-commercial","category-digital-transformation","tag-data-driven-retail","tag-location-intelligence","tag-retail","department-data-and-ai"],"acf":{"short_description":"Retail executives who don't understand their customers will lose them to the competition.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"Retail executives can commiserate over apocalyptic headlines\u2014or they can find new ways to drive their business forward. Those who choose the latter have an ally in the fight: data-driven commerce.\r\n\r\nThe retail industry has spent a lot of time lately looking in the mirror. For some, it's a fun-house mirror that exaggerates the industry's flaws, shrinks its strengths, and gives birth to sensational terms such as retailpocolypse<\/em>. Yes, brick-and-mortar retailing has been disrupted by e-commerce, m-commerce, and other shopping innovations. No, it is not doomed to destruction\u2014even if some brands won't survive the upheaval.\r\n\r\nAmid the din, leading executives see cause for optimism. According to research by Deloitte<\/a>, 44 percent of consumers spent more on retail in 2017 than they did the previous year. Just 14 percent spent less. Is that any surprise when, for instance, one in six young people say they won't wear an outfit again<\/a> once they've been seen in it on social media?"},{"acf_fc_layout":"image","image":19991,"image_position":"left","orientation":"horizontal","hyperlink":"http:\/\/www.esri.com\/digital-transformation?adumkts=branding&aduc=advertising&adum=house_ad&utm_Source=advertising&aduca=branding&aduco=dt_leading_companies&adut=wherenext_data-driven_retail&adupt=awareness"},{"acf_fc_layout":"content","content":"Still, the recipe for retail success isn't especially clear. One indisputable fact is that traditional tactics won't spare a retailer from the fate of Toys \"R\" Us, Sears, Payless Shoes, and Radio Shack. Retail is changing. The companies that emerge from this disruption stronger will do so because they know their customers better than competitors know theirs. For that, these companies will turn to data-driven commerce.\r\n\r\nThe Myth of the Apocalypse<\/strong>\r\n\r\nPhysical stores account for 90 percent of retail sales in the United States, and shoppers say the in-store experience is important to them. In fact, a 2017 IBM study of Generation Z consumers<\/a> found that 98 percent of Generation Z consumers favored making purchases in store either most or some of the time. By comparison, 76 percent said the same of online shopping. (IBM defines Gen Z as people born in the mid-1990s and later.)\r\n\r\nThe in-store experience also remains front and center for more mature shoppers. Seventy-four percent of baby boomers prefer to shop in store<\/a>, according to a study by Oracle.\r\n\r\nAnd yet consumers aren't content to shop only in store, and retailers must adapt. Shoppers want the tried-and-true as well as the new: intuitive e-commerce, loyalty apps, same-day delivery, and in-store pickup.\r\n\r\nAs savvy retail executives improve the linchpin of retail\u2014the in-store experience\u2014they are finding clues in digital data. In its 2018 Fjord Trends<\/em> report<\/a>, Accenture noted that \"the emphasis [among retailers] is shifting onto how best to use digital as an invisible enabler of physical and sensory experiences.\"\r\n\r\nData-driven commerce is at the center of that shift.\r\n\r\nWhat Is Data-Driven Commerce?<\/strong>\r\n\r\nRetailers and brands are in the midst of a once-in-a-generation shift, as consumers demand more relevancy from the companies they patronize\u2014rather than just good products at lower prices."},{"acf_fc_layout":"quote","image":37342,"text":"The coming-out party for data-driven commerce is happening at a time when consumers are defining the conversations between themselves and the companies they do business with.","author_name":"","author_profession_organization":""},{"acf_fc_layout":"content","content":"

James McCormick, a principal analyst at Forrester, called it \"the age of the customer\" on a recent podcast. \"We're in this age where the customer's more empowered than ever before,\" McCormick said, \"and actually more powerful than the brands when it comes to managing the narrative of the discussion and the engagement with the brands.\"<\/p>\r\n

Customers want brands and retailers to talk about things that matter to them and to deliver curated offers that feel tailored just for them. They expect consistent, quality experiences on social media, on their devices, and in stores\u2014a unified conversation for unified commerce<\/a>.<\/p>\r\n

Many retailers are stumped. Nearly two-thirds of them told Retail Systems Research<\/a> (report gated) that defining the right kind of conversation to have with consumers is their top challenge. This challenge goes by many names, including getting closer to the customer<\/em> and creating personalized content<\/em>.<\/p>\r\n

The answer is in the data.<\/p>\r\n

A company that wants to create relevant messages and conversations must first understand its core customer. This includes knowing what kind of products customers browse and buy as well as what they care about and why they might be loyal to a particular brand. This involves using a form of modern-day psychology that draws heavily on digital data\u2014to find insight on customer groups while respecting individuals' privacy.<\/p>\r\n

Consider a short list of the data sources that retail executives can use to understand customers and shape conversations:<\/p>\r\n\r\n