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While more than half (55%) of retail IT leaders say data and analytics is important to their business, rising to 64% for food and grocery, a quarter (25%) do not.
This comes at a time when strong data analysis is most needed to take advantage of a surge in online sales following the pandemic. UK retailers experienced an average 52% increase in online traffic as a result of the pandemic last year, rising to 130% in some cases.
Ed Hayes, data, privacy and cybersecurity partner at TLT, explains: “The number of data points created by this growth in online traffic increases the value of good data analytics considerably, as it can help retailers ensure their marketing spend is targeted most effectively.”
Yet retailers admit they face a persistent struggle with making the best use of their data. A mere 10% believe they realise the full value of their customer data, while only 12% say the same about their non-customer data.
The biggest challenges include having too much data (51%) and it being out of date or irrelevant (49%), which could raise separate data protection compliance issues aside from missed opportunities to improve IT investment and marketing decisions.
45% of IT leaders say the most valuable data is the hardest to access.
Besides challenges with data analytics, the recent surge in online traffic and a gap in digital capabilities has left retailers open to other risks.
Two thirds (63%) of retailers are generally willing to spend money to reduce cybersecurity and data risks. However, while half (52%) are just as willing to do this now as they were before the pandemic, 20% are less so and only 19% are more willing.
Hayes continues: “We have seen most large corporates struggling in recent years to grapple with the sheer volume of data they control and to realise its full potential.
“Retailers know this has to change, but the pandemic and the sustained growth of online sales means getting to grips with the challenge should now be much higher on their list of IT priorities. Apart from any commercial benefits, as a matter of data protection compliance retailers need to know they have the correct permissions to store, analyse and use data, and that they have robust systems and good governance arrangements in place to keep data secure. Once they get those basics right, they need the right strategy to manipulate that data and generate the most beneficial insights.
“At a time when customers are increasingly swayed by responsible business behaviour, and the regulator is showing its teeth when it comes to enforcing data regulations, security is paramount. The businesses that we see getting it right are those using data protection impact assessments (as the law requires) when implementing any new system or tool using data. The results of a properly conducted assessment can and should be a key part of any data strategy.”
Read the full report, The Digital Imperative: Bridging the IT and data gap in post-pandemic retail.
Visit TLT's Retail Agility hot topic page for further reports, insights and commentary.
07 June 2021