Speculation of ongoing inflation and supply chain uncertainty in categories from coffee to catnip are leading retailers and CPG brands to search for profit protection and customer satisfaction by out pricing, out promoting and out merchandising their competition.
However, most organizations are under equipped to create or activate a competitive strategy to meet their objectives.
This is largely due to the fact that their competitive data practices have treated competitive intelligence like a commodity instead of a business driver.
How competitive data has become a commodity
Few would argue that a comprehensive view of the market is important to inform and protect pricing, promotion, positioning and merchandising/assortment decision making.
However, gaining access to consistent, reliable and quality competitive intelligence has proven to be expensive and resource heavy. The result is retailers and brands questioning whether the investment is worth the return.
As a result, we have seen companies take actions with their competitive data strategy that leaves any intelligence gained as a “nice to have”:
Quantity over quality
Action: Some retailers and brands have simply lost faith in the ability for data providers to deliver a consistent, high quality market intelligence. Because of this, some companies become data collectors by ingesting as much data at the lowest cost and figure they will reconcile and cleanse it themselves.
Outcome: More data does not equal better actions. In fact, companies that take this approach are finding that the investment in people to make this data ready for analysis or to drive other systems such as price and assortment optimization engines far outweighs the investment in better quality data. In addition, since the data collected is not aligned with a business need, often it goes unused or by the time it is accessed any insights are no longer relevant.
Applying old practices to a new world
Action: Today’s retail reality has opened opportunities for brands and retailers to act more dynamically, own a customer experience outside of the store, and know more about their market than ever before. However, many retailers and brands are still thinking in static, reactionary ways by limiting their intelligence to fewer products and fewer competitors less often. They are operating by the “sending someone into a store” philosophy instead of the “what information do I need to make the best decisions” strategy.
Outcome: Unnecessary sacrifices. Because competitive data collection was limited by the cost of sending someone into a physical store, brands and retailers took the how little data can we get away with. This type of thinking doesn’t work in today’s world where prices, merchandising, availability and promotions can change by the hour. Yes, prioritizing data that your company can make actionable is important, but this prioritization should be guided by your growth strategy and not your ability to do more with less.
From Data-Driven to Business Intelligence
Take look at the annual reports of leading brands and retailers.
There are few without some promise or goal about digital transformation and data advancement.
Why? Because data-driven is non-negotiable in the digital commerce world we operate in today.
If data-driven has become a necessity, data cannot be treated like a commodity.
To change this requires thinking about data and analytics differently.
- Start with the business outcome(s) you are looking to drive.
- Prioritize actionability and visibility
- Focus on limiting manual resources instead of limiting market scope
- Work with a partner to define what is possible and how it will work with existing practices.
- Identify “need to have” information and map a path to scale – new competitors, new channels, new frequencies, etc.
- Share the plan and outcomes cross-functionally
It is true that retailers and brands have more data from more places to them available than ever before. While this should result in a greater ability to compete at both a global and granular level, the difficulty to operationalize competitive data to keep up with the dynamic, multi-channel environment has disconnected the intelligence from the data.
It will be collaboration between data providers, like Bungee Tech, and strategic brands and retailers that reposition competitive intelligence from commodity to business driver to meet the ever-changing needs of consumers, navigate pricing and supply chain disruption and compete profitably regardless of changes in the future.