**U.S.:** A new study reveals a strong link between data readiness and financial performance in grocery and non-grocery retailers. Data-savvy companies outperformed their competitors significantly, but many still struggle with data silos and lack real-time access, hindering their growth potential.
A recent study focusing on U.S. grocery and non-grocery retailers with annual revenues surpassing $500 million has revealed a significant correlation between data readiness and financial performance within the retail industry. The report titled “Data-Driven Advantage: How Grocery and Retail Merchants Can Accelerate Growth,” produced by PYMNTS in partnership with Carat from Fiserv, involved a survey of 390 executives designed to evaluate their capabilities in the realms of accessing and utilising real-time sales data and other business-critical information.
The findings of the study disrupt conventional views of data usage in retail, highlighting that merely collecting data is insufficient; rather, efficiently analysing and disseminating it across various departments has emerged as a fundamental requirement for sustainable growth and competitive advantage in a rapidly evolving retail environment.
Crucially, the report identified stark contrasts in performance between retailers described as “data ready” and those that are not. Specifically, it noted that data-driven grocery and non-grocery outlets experienced over five times greater revenue growth in the past year compared to their less data-savvy counterparts. This substantial distinction is further magnified within companies that boast dedicated analytics teams; grocers with such teams reported nearly double the average revenue increase compared to those lacking such resources.
Despite the apparent benefits of being data-ready, the report underscores that a considerable segment of the retail sector grapples with issues related to data silos and lacks dedicated analytics capabilities. This deficiency significantly limits their potential to garner comprehensive insights and leverage market trends effectively. Moreover, access to real-time data, particularly concerning sales performance and supply chain operations, poses a substantial challenge for many retailers. The findings indicate that while nearly three-quarters of those surveyed acknowledge the critical importance of real-time data, over 65% currently operate without access to such vital information.
Key takeaways from the report further illustrate the implications of this data divide across the sector:
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Revenue Discrepancy: Data-prepared grocery and non-grocery retailers reported over five times more revenue growth than their counterparts who were less prepared for data-driven decision-making.
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Challenges in Data Sharing: More than half of the retail and grocery merchants experience obstacles in sharing data across departments, which impedes a holistic view that is essential for strategic decision-making.
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Deficiency in Real-Time Data: Despite over 70% of grocery and retail executives insisting on the necessity of real-time supply chain data for effective business decisions, more than 65% admit to lacking access to such critical information.
The report not only discusses the financial ramifications but also highlights the operational challenges faced by retailers lacking actionable data. A striking 99% of the surveyed executives reported facing problems like errors, delays, and missed opportunities, attributed directly to insufficient access to timely and usable data. The inability to harness data effectively also affects a retailer’s capacity to innovate, expand its customer base, and manage supply chains proficiently, leading to pitfalls such as excess inventory costs.
Ultimately, the findings indicate that to succeed in the current competitive landscape, retailers must address both organisational silos and technological barriers. The report champions the idea that a concerted effort to become data-ready is crucial not only for survival but also for thriving amidst the challenges presented by modern retail dynamics.
Source: Noah Wire Services
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