Australian retailers need to pay attention to their customers

Australian retailers need to pay attention to their customers

Every business person knows that keeping up with trends is essential if you want your business to grow, but many Australian retailers are failing their customers by not paying close enough attention.

This claim was made recently by Hans Van Schie, the chief technology officer for Teradata Australia and New Zealand. Mr Van Schie said Australian retailers must follow in the footsteps of the overseas players and start collecting data on their businesses if they want to survive in the future.

"The key to a successful business is in the detail. In the so called information age, we also see the greatest level of data destruction within organisations," said Mr Van Schie.

He said one of the keys to success is stocking the right items. The other is having enough of these items on the shelves so consumers can purchase them when they enter the shop.

In the USA, Wal-Mart uses Teradata's active warehouse software to monitor every product it stocks. The system is updated so frequently, that just 10 minutes after an item is sold, the company knows. This lets them respond quickly to customer trends. If there is a sudden run on an item, Wal-Mart can order more. If an item is moving in one region, it can send the goods to this area, reducing the chances of shortages and overstocks in different areas of the country.

In the UK, Sainsbury's is also monitoring its customer buying behaviour. By examining market baskets, Sainsbury's was able to categorise shoppers and identify poorly-performing products. Customers were divided into 10 segments based on how much they spent and the types of goods they bought.

Using this technology, the company discovered that "foodies," people who are passionate about food, made up 21 per cent of its customers Ð but were responsible for 24 per cent of its revenue. In some branches, "foodies" represent 70 per cent of customers.

Using this data, Sainsbury's varied each store's product mix and identified which products contributed most or least to sales and adjusted their inventory accordingly. Mr Van Schie said Australian retailers should use the experiences of overseas customers.

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