Survey Finds Retail and CPG Companies Prioritize Customer Behavior Analysis to Guide Strategy, but Few Understand How to Use It
With unexpected changes in consumer behavior and a “new normal” buying landscape, using data to drive strategic business decisions is more important than ever
Four out of five retail and consumer packaged goods (CPG) companies say that customer behavior analytics is a strong priority for their brand today, indicating that it will continue to grow in importance. Yet, most are failing to use it effectively.
Organizations have been experimenting with advanced analytics, but now, as erratic buying behaviors are expected to continue, the adoption of AI and automated analytics to match business strategy with consumer demand is rising.
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The 2020 Retail & CPG Customer Behavior Survey commissioned by Outlier found near universal agreement (91%) among respondents. This majority say that tracking customer behavior data is critical for staying competitive; however, 85% of respondents also acknowledge that this data is only as helpful as their ability to interpret or use it in decision making.
Companies are collecting hundreds of instances of data per customer but are struggling to apply it to their business: only one in three (34%) believe their company is leveraging data and analytics effectively. This raises the issue of interpretation and simplification of results. While a data analyst can set up dashboards, there’s a gap in retail and CPG brands’ ability to interpret and translate the results into action.
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Further, brands can’t distinguish important or unexpected changes in data using current reports or dashboards. Changes can often indicate broken processes, disconnects with customers or other barriers to customer action. Fixing them can immediately improve operations, revenue and customer loyalty or allow the brand to take advantage of a behavioral change.
So far, efforts to minimize this gap have pushed the industry toward more data, more inputs and more dashboards. But, a lack of high-quality data analysis remains the number one challenge for retail and CPG brands, with limited ability to translate results into strategy as the second greatest challenge.
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