Data analytics are revolutionising retail – and most other industries too.
As retailers, it’s helping us take the guesswork out of selling – enabling us to make better, more informed decisions by giving us unprecedented insights into our customers.
At Shop Direct, we’re no strangers to data – an 80-year heritage in remote retail means we’ve always had a rich data asset and experience harnessing it – but even for us, the past three years have seen the game change beyond recognition.
Where have all the HIPPOs gone?
In that time, we’ve ditched the catalogue, merged heritage brands into Very.co.uk and Littlewoods.com, seen mobile boom to become by far our most popular channel, and invested in leading-edge technology, including a world-class data lake and the tools, partners and people to maximise it.
When we make changes to our sites, we test our way to success and rely on the accuracy of the data to tell us what our customers like best. We use data to personalise the experience for each customer. And we make trading decisions using forecasts based on data.
After years as a fusty old catalogue business, data analytics have put us firmly on the path to becoming a world-class digital retailer.
The HIPPO – ‘highest paid person’s opinion’ – is extinct.
But does the power of data mean there’s no longer a place for instinct in retail?
“While analytics help us identify patterns and relationships in data a human view couldn’t spot, business savvy and ideas that arise from observation often guide the subject of analytics and the methods we use”
We don’t think so.
While analytics help us identify patterns and relationships in data a human view couldn’t spot, business savvy and ideas that arise from observation often guide the subject of analytics and the methods we use. For example, what data is relevant and what models do we use?
Like most businesses, we’ve been set up until now in traditional departments – retail, product, finance, and so on. It’s worked well.
But as in most organisations, each department has silos, with more silos within silos.
Today, we marry instinct and analysis but start with customer research and closeness, rather than technology. We don’t do tech for tech’s sake; we want to get to the heart of what matters to our customers.
With all this in mind, there’s a case for trying another way of working; a way that releases the potential of our people to collaborate, be creative, test to success and focus above all on delivery of customer outcomes rather than the needs of the organisation.
We believe ‘agile’ methodologies can work for us in the long term in lots of different areas.
We developed Very Assistant, our WhatsApp-style conversational user interface, using an ‘agile’ approach − bringing small, lean squads with members from different departments together to make sure we had the right people, with the right mix of skills and experiences, on the job from the start and able to make quick decisions.
The idea for the Assistant came from one of our regular company-wide hackathons, and was developed through a six-week innovation pop-up programme which included intense research, delivery and a test cycle to inform the scope of the Assistant based on what our customers said was most useful to them.
“Small, lean squads with members from different departments meant we had the right people, with the right mix of skills and experiences, on the job from the start and able to make quick decisions”
Today, Very Assistant is a key part of our app and getting rave customer reviews. Now, we’re working on an AI-powered natural language version.
‘Agile’ allows us to bring together and empower the right people, working efficiently in the right ways. We can build, test and learn from our customers in a short period of time, giving us the confidence to launch initiatives quickly.
But it also encourages a range of views and skills to come to the fore in the interpretation of research and findings, and improving future sprints.
Rather than killing off instinct, ‘agile’ is proving to us that gut feeling isn’t dead in post-big-data retail.
Taking the leap
We’re now extending our use of ‘agile’ across our retail teams at Shop Direct. It’ll mean cross-functional, customer-centric squads of data scientists, engineers, designers, traders, marketers and others.
To facilitate it, we want to make our culture and environment even more collaborative.
We’ve already started with our new London hub, which is set up for group working. We’re also exploring new ways for colleagues to work flexibly, and reviewing the tools and tech we give to our people to understand which ones we need to develop.
So, does using data effectively mean ignoring your instinct? In some cases it does, in many it doesn’t. We believe we’re better off with both.
What’s most important is harnessing the power of the right people, with the right skills and the right insights around the right initiatives for our customers – all enabled with the right technology.
And that’s absolutely what we’re focusing on now at Shop Direct with ‘agile’.
Jon Rudoe is retail, technology and data director at Shop Direct