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Demand Intelligence Among IDC’s Top 10 Retail Predictions
Just read a great article by Amanda Ferrante based on an interview of Leslie Hand, Research Director at IDC Retail Insights for Retail Touchpoints. The interview focused on providing new strategies to optimize the value of IT in 2010, as IDC Retail Insights unveiled its Top 10 Predictions for the retail industry. The IDC report explored several hot retail topics, including social commerce, mobility and how demand intelligence is driving inventory management.
In the interview for Retail TouchPoints Leslie expanded on the IDC predictions. The first set of points were around the impact of social networks and it sizeable impact in retail. Everyone is talking about social networks, and we all know it is like the iceberg that sank the Titanic. We see a small piece and there is a big chunk underwater! (bad analogy!) But no ones knows the true financial value of this. I guess the analysts counsel is to chase this bubble it and stay on top of it, so that when folks figure out how to monetize it, you are positioned well. Just hope that we are not standing there with a load of tulip bulbs!
The interview mentions Demand Intelligence as being critical. Leslie says that retailers with capabilities for sensing demand were able to fine tune assortments, reduce demand forecasts and adjust prices and promotional programs to maintain margin expectations given expected product sell-through issues. On the flip side, many retailers were left holding the bag, as they did NOT have the capabilities to adjust to the changes. As consumer spending shifts and demand fluctuations grow, Demand Intelligence is mandatory to run a a profitable business.
In Leslie’s words “Many of the retailers who were not able to adjust expectations soon enough, because of the timeliness of demand data or insufficient analytics, remedied the situation by investing in better forecasting and planning tools in 2009. Part of the success this past holiday season can be attributed to merchants sticking to the plan, with an understanding that the data and the analytics and planning tools that were used to develop the plan were smarter and more agile than human experience alone. We believe this was a tipping point for many retailers, who may not have been fully invested in demand intelligence before.”
The predictions also touch on the importance and trends of mobile applications, and connecting customer behavior and purchase data for more insight. However, to me, the second one sounds like lots of data, long implementations, ……
On that note, I would like to add that a key factor for applications to be successful in this economy is quick proof points and fast implementation. As competition heats up even more, retailers needs tools that can quickly demonstrate proof points and deliver value. Solution providers and software vendors need the capability to quickly implement their solutions, without lengthy and costly implementation cycles. This is even more important for the small and medium retailers. I guess the bigger guys would say … why leave me out! :))
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How Good Is Your Demand Intelligence?
I was meeting with Martin, the CEO of a fortune 1000 Company. He talked about sales productivity as a significant opportunity and an area of strategic focus for 2010. “We have been selling this product for years. Yet, every day is ground hog’s day for our sales reps. What I mean by that is every sales call and quote request is treated as if we have never sold this product before!”.
Maximize Sales Productivity On Every Channel With Demand Intelligence
In the B2B markets there are distinctive patterns in the product choices that customers make. It isn’t really customer intelligence as much as demand intelligence. The B2B markets are different from B2C. The average purchase value is typically larger, the frequency of the same end-customer is lower, but there are distinctive patterns in the product purchases. The purchase patterns exist by product choice combinations, customer type, vertical, usage, geographic region, price point and so on.
“I know that there are patterns in what our customers buy,” added Martin. He was previously the VP of Sales and has knowledge of what products customers buy. “We need our sales reps to have access to that intelligence so that they can be better advisors to customers and close the deal faster. I have sat in sales meetings with a company exactly like the one we sold to 3 months ago, and watched my sales rep grill the prospect on product requirements. That hurts our sales more than anything else.”
In a recent blog, Michael Gerard from IDC wrote a very interesting article on the same topic. He mentions a story where a CIO from a $10B+ company had to continuously teach a vendor sales reps what he had purchased from them in the past. The article goes on to state that this can lead to poor credibility on the sales front lines.
There is a solution for this problem. Every company is sitting on tons of sales data. It is a wealth of data that can reveal what their customers are buying and where they are willing to spend their money. Emcien offers analytics that auto-detects the choice combinations in sales data. What are they buying? What are popular product choice combinations? What are popular choice combinations by vertical? What combinations are profitable? Which ones are not? This is the demand intelligence that makes each day NOT be ground hog’s day!!
As a first step, it is invaluable to arm your sales reps with this intelligence so that they can be smart on every deal. In fact, every sales channel can benefit from this intelligence. Here are a few examples -
- Sales reps can use demand intelligence to be better advisors to customers, convert requests to quotes faster and recommend good choices to close the deal. Even a simple report on what is the fastest selling product choices will empower your sales reps, and drive to the bottom line.
- Your ecommerce site can use demand intelligence to quickly recommend the best products to help the customers to self-serve on and make better decisions.
- Inside sales team can use demand intelligence to quickly complete quotes and close the deal. I was talking to an inside sales rep and he told me that his biggest challenge is quickly responding to a quote with a price. ”We have done this so many times before,” he said. “Why does it take us to long to get a price? We lose deals because we cannot respond fast. The first to respond with a quote locks in the deal 90% of the times, even if the price is higher. We lose deals by being slow.”
- Call centers can use demand intelligence to cross sell/up sell based on buying patterns. The turn over in call centers is high. Automating the cross/up sell with demand intelligence will dramatically improve productivity and profit.
Quoting Michael Gerard “This is only the tip of the iceberg of course.” Demand intelligence can dramatically improve your sales performance, customer satisfaction and profit margins.