New JDA survey finds missing link to omni-channel success for manufacturers and retailers

A JDA Software Group report has revealed that most companies lack the ability to mine and leverage important customer data, and are therefore failing to meet evolving shopping demands.

The JDA Voice of the Category Manager survey reflects nearly 100 professionals responsible for category management and merchandising activity in North America.

The study suggests companies are realizing the path to success in a highly competitive, omni-channel market hinges on their ability to understand consumer behavior. Retailers and manufacturers can unlock significant competitive advantage by leveraging consumer insights to make category decisions and create localized merchandising assortments.

As such, respondents indicated that their number one investment priority in the next five years is big data and predictive analytics (41%), followed by investment in customer-driven data science (37%).

“The fact that manufacturers and retailers plan to prioritize investment in big data and predictive analytics over the next five years is a true testament to the transformational impact that the modern shopper is having on these sectors,” said Todd McCourtie, senior director, solution strategy at JDA. “Companies are realizing that the path to success in today’s omni-channel market is to truly understand how, why, and in which manner they wish to shop.”

While respondents on average stated that they are somewhat successful in mining consumer data to generate usable insights (82%), less than one-fifth (17%) feel they are highly successful in their ability to leverage the data to derive actionable insights.

When asked to identify which processes respondents felt they lacked the most proficiency in, nearly 70% indicated that they are most behind on leveraging predictive analytics for improved pricing and merchandising. Additionally, nearly 60% of respondents claimed that they are also behind in leveraging geographic and socio-economic data for targeted promotions and offers.

For manufacturing and retail survey respondents looking to improve merchandising, pricing and promotional efforts, the top two behaviors they’d like to gain additional insight into were the modern shopper’s path to purchase (67%) and price sensitivity (53%).

Survey respondents cited personalization and localization (68%) and increased development of digital technologies (62%) as the top two priorities they plan to implement within the next year. Omni-channel retailing also remains a high priority, with nearly 60% of respondents citing it as one of their top two priorities.

Effective assortment localization is dependent on a company’s ability to identify the key product attributes that drive local preferences and demand in each category. The survey found that companies are best able to evaluate the success of their localization efforts by measuring an increase in sales (37%), increased visibility into stores (21%) and improved inventory levels (21%).

Respondents had varied opinions on which mobile technologies would be most beneficial to their business:
● 26% indicated augmented reality technology that provides shoppers with personalized information while shopping
● 25% identified the ability for customers to leverage beacon technology (Internet of Things) via mobile device for increased self-education on products
● 21% identified in-store mapping for easy self-navigation around stores
● 19% believe location-based mobile coupons would be most beneficial

Despite interest in beacon technology and augmented reality, neither manufacturers nor retailers are planning to prioritize investment in these technologies in the next five years.

Manufacturer vs. retailer point of view
Less than half of manufacturers and retailers feel they are successful in their ability to mine data to generate usable insights, though respondents from both sectors agree that there is more to be done when it comes to better understanding and addressing the needs of the modern shopper. For example, the majority of manufacturers surveyed (83%) see themselves lagging when it comes to leveraging predictive analytics for improved pricing and merchandising, whereas retailers report feeling behind on analyzing big data to recognize consumer preferences and demand trends (59%).

“Addressing these trends will require some organization-wide changes to policies and procedures, as well as the adoption of technology solutions to help automate processes,” McCourtie said. “It is a necessary evolution for those responsible for merchandising decisions. The success of a company’s merchandising strategy, both today and in the future, hinges on how companies leverage these data-driven insights to better serve the modern shopper’s ever-changing needs.”

JDA Software Group, Inc. conducted this survey in April 2017 with nearly 100 professionals responsible for category management and merchandising activity in North America. Click here to access the JDA Voice of the Category Manager 2017 details.