DDi - April/May 2013 - (Page 100)
Where’s the pot of gold for retail store designers?
By Mindi Trank
etailers like Target have been generating some commotion about
large-scale data analytics. The buzzword is “big data”—an incredibly
powerful weapon in the increasingly complex business of retail. Target’s pregnancy-tracker story made waves in the industry and has set many a
retail executive scrambling to ﬁgure out what big data means for their company. Could Target really identify when a female shopper was pregnant before
she announced it to the world, simply by tracking her purchases? Apparently,
according to a February 2012 New York Times article, the answer is yes.
What makes sense for your company and how should you address the big
data opportunity now?
The few trailblazers that are pursuing its potential are revolutionizing
retail—and are seeing a potentially massive payoff. According to McKinsey
& Co., a retailer using big data to the fullest extent possible could increase its
operating margin by more than 60 percent. Yes, 60 percent!
Despite the potential “pot of gold” and Target’s successes, most retailers have
struggled to harness and effectively utilize big data when it comes to store design
solutions. Companies of all sizes can—and should—analyze internal and external data as quickly and cost-effectively as possible. The key is sifting through
the information and separating the insights from the considerable noise. But,
not everyone has the resources to capture, organize and understand big data.
It is possible, however, to fuse customer data with company data to not
only understand and prioritize growth and competitive opportunities, but
also to bring a much higher degree of science to the art of store design.
Yet, more data is not the answer. To generate real value, companies must
have the “right” data, thoughtful translations of the insights and the ability to
respond with appropriate solutions.
Focused amounts of customer data are being used to explore various concepts, shopping priorities and category growth opportunities. It then becomes
possible to link this customer data with actual ﬁnancial data to calculate the
value of those various retailing decisions. This allows more rigorous, factbased decisions to be made by channel, customer type, competitor and even
For example, one (unnamed) retailer was able to identify and quantify
categories that offer the greatest growth potential from existing customers.
To take it further, the retailer could then identify which competitors are most
vulnerable in those key categories and design solutions to capitalize on those
opportunities to gain share.
The retailer was not only able to identify categories that offered the most
proﬁtable growth opportunities, but also categories to be edited, maintained
or leveraged. The retailer expanded two strong categories, maintained core
categories and edited assortments in categories that offered less opportunity.
Based on monetizing competitive and category opportunities, the retailer
was then able to make strategic decisions regarding space allocation and merchandise mix within the context of the new store design.
The ﬁnancial impact was signiﬁcant. The analysis enabled the retailer to
increase sales by more than 20 percent, while also increasing gross margins
with an enhanced customer experience.
Today, retailers can use data more effectively to make strategic decisions
that begin with the customer and result in a more rigorous design process.
Analytics-driven design can heighten key touchpoints during the customer
experience while increasing sales proﬁtably—now that’s big!
—Mindi Trank is vice president, brand and consumer strategy for Columbus,
Ohio-based Chute Gerdeman, which has produced a new report about the fusion
of quantitative research, store design, technology and experience to get action and
results. The report will be available at Chute Gerdeman’s exhibit in the Design
Inspiration Showcase at GlobalShop 2013, or you may contact Whitney Kyle at
email@example.com for a copy of the report.
Table of Contents for the Digital Edition of DDi - April/May 2013
DDi - April/May 2013
Table of Contents
From the Editor
From the Show Director
Tiffany & Co.
Paris Kids Department
Technology & Customer Engagement Section
Big Data Column
Design Leaders 2013
Shopping with Paco
DDi - April/May 2013