Luxury Daily – As data collection technologies progress, retailers are finding more reason to expand their analytics abilities, something in which luxury retailers can benefit.
According to a report from Boston Retail Partners, 44 percent of retailers think that analytics is a major priority in the future. Additionally, more than 82 percent identified the need to improve their planning systems to act on data analytics as something that they need to focus on in the future.
“Luxury brands face a few unique challenges around analytics,” said Gene Bornac, vice president at BRP, Boston. “The main challenge is the smaller data set.
“Luxury brands sell to fewer customers at higher prices,” he said. “Unfortunately, analytics work better with larger numbers.
“That being said, luxury retailers generally tend to know their customers better and can utilize that information to improve their results from data analysis.”
For larger retailers such as Walmart or Best Buy, collecting this data is not a problem as they got thousands of customers each day at many of their locations.
Luxury on the other hand has a more difficult obstacle to surmount: the low sample size.
Retailers that sell luxury products, by definition, serve a smaller segment of the population. This means that with fewer people coming in, there is less data to collect as well as a higher propensity to have the data skewed by outliers.
But luxury retailers can alleviate these pressures in a few ways. For one, they can work on making the data that they do collect as comprehensive as possible. One solution is to use WiFi, which is more reliable than beacons, for mobile data collection in-store.
WiFi, once the dominant in-store location technology, has seen its role come under attack from newer, less-expensive solutions such as beacons. However, WiFi’s broader reach along with recent advancements that make it more cost efficient and accurate, underscore its ongoing relevance.
Accurately tracking traffic and determining how it relates to conversions is a key to sustaining in-store revenue, yet many retailers have not equipped themselves or their employees with the tools to determine and act upon these relationships. In-store remains a crucial part of a retailer’s strategy even as numbers fall, but brands must first make use of the data they already have before they can improve.
Luxury brands that make the most of the data they can collect should be able to circumvent the problems presented by a small sample size.
“Like all brands, luxury brands benefit the most from pulling all of their data together,” BRP’s Mr. Bornac said. “Using the advantage that they have with their customer relationships, they can create a real-time view of their customers’ needs and business opportunities.”