Q&A: An interview with Paul Boyle, Retail Insight CEO
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- 8 minute read
- Retail Insight Team
Paul Boyle, Retail Insight CEO, provides an incisive assessment of the state of grocery retail in our new Q&A interview.
Paul discusses how stores can navigate labor shortages, advises on how leaders can sweat their data harder, and examines the emerging technologies that are making the headlines.
Football fans will also enjoy his attacking and defending analogy. Read the full interview below.
1. What's your perspective on the biggest challenges and opportunities facing retailers at the moment?
I think we need to move beyond talking about ‘post-covid challenges’, but clearly there are continuing impacts upon infrastructure and within the supply chain. Whether it’s geopolitical issues or blocks on logistics routes - all of these issues just add to an already complex environment.
I think one of the major challenges for grocers is that there are far fewer staff in stores. If a store used to have between 20 and 40 managers, it might now have between four and five. At the management level, it’s a much smaller group running what are sometimes $50 million turnover stores. So, for the few staff that they do have, whether at management level or in store operations, they need to augment with better technology, data and analytics to help them focus on the right tasks, at the right time.
“If a store used to have between 20 and 40 managers, it might now have between four and five. So retailers have a desperate need to augment the staff they do have with technology, data and analytics.”
2. In what ways can data and analytics help grocery retailers solve these challenges?
To use a football analogy, we’re either helping our clients attack or defend. To attack is to help our clients drive more sales. For example, Retail Insight’s availability systems are focused on helping identify gaps on the shelf or barriers to sale – help them fix these and we boost their overall sales performance and margin.
When defending, we’re helping retailers understand where they might be letting profit slip through their fingers. It’s here that our waste solution comes into play. For example, when you have a product that is close to expiry, it often ends up being wasted. But we can help you price it more effectively to drive what is still good product into the hands of customers, rather than into landfill, thus avoiding the cost of wastage and disposal of the product.
Both attacking and defending are made easier when they’re powered by the insight that comes from data analytics.
“To use a football analogy, we’re either attacking or defending. Attacking is helping our clients drive more sales. When defending, we’re helping retailers understand where issues of profit loss might occur across their business.”
3. What about the role of emerging technology such as cameras, computer vision and robotics?
I think some of the fledgling technologies haven't quite gotten to a clear position on economic benefit versus cost so the business case hasn’t stacked up. Coming back to the point earlier on challenges retailers face, many of them have spent huge sums of money on large-scale technological solutions that maybe haven’t delivered as well as they would’ve liked. The money they’ve spent on tech has outpaced the return they’ve gotten from it at either the top or bottom line. So, before layering heavy hardware and infrastructure investments on top of that, retailers should consider whether they’ve really sweated all the assets that already exist in their businesses, namely the data that they possess.
It was only a couple of years ago we were excited by big data and data lakes that we could swim around in. Do retailers really feel they have sweated all the value from all of the data that already exists across their operations? My very truthful response to that is, no. And I would say the same to anyone in any business: you will not have sweated all, or indeed much, of this overall data asset and there is a huge amount of value to be taken.
When I think about new grocery technologies, I welcome computer vision, sensor technologies, IoT., RFID…etc. Because, ultimately, they create lots more signals that we can use to infer where gaps or issues might be occurring. We might even see something in the data that signals or preempts a sales or profit performance issue before it actually occurs. So all these signals are welcome, but the cost they come at is considerable. Retailers need to question if these technologies are the best use of their spend at the moment, when they are only just scratching the surface of the data asset that already exists.
"Do retailers really feel they have sweated all the value from all of the data that already exists across their operations? My very truthful response to that is, no."
4. What advice would you give to retailers who want to improve the insights they get from their data?
I think a lot of people tend to think, let’s gather all the data we’ve got in one place, and then be led by the data. Bring it all together and, eventually there will be some random patterns or probabilities that materialize and present themselves to us.
The approach we’ve taken at Retail Insight has been much more determined. We’re not a solution looking for a problem. We have very specific retail issues in mind that we are trying to solve, to make life easier for our customers. So my advice to retailers would be to not try and boil the ocean. Be very specific in the problems you are trying to address. Then work with experts who understand these problems to define exactly what data you need in order to solve them. Rather than pulling all the data and hoping for the best, be really deliberate and specific in terms of the data you’re asking for in relation to the problems you’re trying to solve.
The next challenge is to not over-engineer the solution itself. There are simple and elegant ways to present information that drive action. There is always a tendency to spit out as much information as possible, but what we’re really trying to achieve is maximum impact from minimal intervention.
To explain why that is so important, if we take the challenge of labor turnover or churn in retail, it has been over 100% in some regions for the past few years. As a result, staff often have little experience and have had minimal training. So, when they come to look at a problem, the message has to be really straightforward, or you run the risk of over-instructing and confusing them. The simplicity of the message is really important, and that extends to communication on a handheld device. These alerts should be really clear: complete this task, this is where you’ll get most value, look at the return you’ve delivered as a result… etc.
“There’s always a tendency to spit out as much data as possible. But what we’re really trying to achieve is maximum impact from minimal intervention."
5. How does changing customer behaviors impact retailers' store models?
It’s well-established that we will continue to go to stores and we will continue to buy online. In fact, we might do both in the same day - go for a big shop in the morning, get home and realize we’ve missed a few items, then choose ultra-fast delivery services like Uber Eats to get our final products. These habits are changing the operating model of stores. We are becoming more sophisticated in how we connect these behaviors with a store model that sustains and satisfies them.
But to truly embrace this evolution, we need to make data less siloed. We need to join data sets and departments to tackle problems.
I spoke with a US retailer recently and, for me, they crystalized this approach. Their problem-centric approach prioritises the issue itself as the focal point of attention. Instead of compartmentalising tasks based on departments or individuals, this approach brings together a diverse range of stakeholders from across the organisation to collectively address the problem at hand. The emphasis is on understanding the problem comprehensively and leveraging the combined expertise and resources available within the organisation to find the most effective solution. It doesn’t start with a single department or individual thinking about what they might be able to do, the problem is put first. Taking value from the connective tissue that exists between the various different departments and data sets is a big topic for us at Retail Insight and will be an exciting development in the coming years.
"Taking value from the connective tissue that exists between different functions and data sets is a big topic for us at Retail Insight”
6. Where do you see retail going in the next five years? What will be the biggest priorities for grocers?
I think for all businesses, profit is becoming increasingly important. Retailers need to achieve market share growth through sustainable means. Through solid economics and making the right decisions - everything from where their stores are opening, to where they are currently located, to where they need to be rationalized. From consideration of their proposition to the customers they are targeting. I think Marks & Spencer are really getting that right at the moment. They have focused on the basics of good retailing – great proposition, continuous innovation, fuller stores, and well staffed at the appropriate times.
ESG is also such a huge component of decision making. Doing the right things for the bottom line at the same time as making an impact on ESG is increasingly important. With our WasteInsight solution, for example, we’re generating huge savings for our clients, but also diverting a lot of products away from landfill and into the hands of their customers - reducing CO₂ in the process. The influence of ESG on retail decision making will continue to grow and grow.
I think the support from analytics and data will increase, just like it is doing in every other industry right now. I think we’ll see more people being effectively augmented with technology, data and analytics, both at head office and in store, to drive better decisions and returns.
In the last 20 years, we’ve seen a massive shift in the understanding of data and what it can bring to the retail world. When we first started at Retail Insight, we spent a lot of time evangelizing about how retailers could use data. But a lot of people weren’t so sure about it. That has massively changed. We’ve got exponentially more data, massively more powerful analytical tools and at the same time, a new generation of data savvy retailers taking charge in the industry. The future is very exciting for data-led retail.
“In the last 20 years, we’ve seen a massive shift in the understanding of data and what it can bring to the retail world. We’ve got exponentially more data, massively more powerful analytical tools and, at the same time, a new generation of data savvy retailers taking charge in the industry"
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Written by Retail Insight Team
Retail Insight takes data and turns it into action. Our advanced algorithms unlock valuable insights that drive better decision-making for retailers and CPGs.