The Current State of Data and Analytics in the Luxury Industry
NEW YORK , April 5, 2022 /PRNewswire/ — Over the past 12 months, in confidential face-to-face, zoom and phone conversations with the CEOs of approximately a dozen large, medium and small luxury goods and services brands, CEO of the Luxury Institute Milton Pedraza heard a recurring theme: Most are dissatisfied with the state of data and analytics resources and capabilities of their group or brand. When Pedraza mentioned to a luxury retail CEO that his brand could now access data from the most descriptive and predictive digital platform (Google, Instagram, Facebook) directly from its customers via Advanced Personalization Xchange (APX) CEO threw up his hands in frustration and said, “We don’t have the in-house expertise or tools to do anything meaningful with the data we currently have, let alone the richer, higher caliber customer data. I feel like we’re amateurs, when everyone else is playing in the major league.”
The CEO got it wrong. Most luxury brands, across all categories and at all levels, also seem to play best at “ambitious” levels of data and analytics capabilities. That sums up the findings of a recent survey conducted by the Affluent Analytics Lab (AAL) of the Luxury Institute. This survey was conducted among executives of luxury goods and services brands and their best consultants around the world. The findings indicate that data and analytics processes in most luxury companies are broken. Here are some of the highlights of the study:
Data Collection Capabilities
When asked to rate their data collection capabilities or that of their client’s brand, a majority (56%) are neutral (34%), dissatisfied (20%) or very dissatisfied (2%). Just 2% are very satisfied, while 42% are satisfied that their brand’s data collection is adequate. As we will see, data collection is the one area in which participants provide the highest ratings for data abilities. After that, internal assessments of the company’s data and analytics capabilities deteriorate.
Data integration capabilities
When asked to rate whether data collected from various internal (e.g. website transaction and browsing data) and external (e.g. data from third-party vendors) sources were integrated In a transparent view of the customer, 72% of respondents said this critical step was only partially addressed, while 15% said it was not addressed. Only 13% feel that this need has been adequately met by the company.
Accuracy and quality of data for analysis
When assessing whether their customer data from internal and external sources is accurate and does not require cleaning or correction to be used for analysis, 69% of respondents say it is only partially processed, while only 21% say they are not. A small group (10%) say that data accuracy and quality are fully considered.
Access to data for analysis
The ability to access data stored internally at one location, such as a data lake or warehouse, is important to different groups within the business, such as logistics, finance, marketing and sales, in order to be able to use the data easily. This is also known as the democratization of data within a company. Regarding this important process, 54% say it is only partially processed, 28% say it is not processed and a minority (18%) say it is fully processed.
Data timeliness for analysis
Data timeliness is the act of making data available for data analysts to perform their critical analytical work in a timely manner. Data timeliness profoundly affects levels of business adaptability and agility. A large majority of respondents (64%) believe that this problem is only partially solved, while 28% believe that the speed of execution is not addressed. Only 8% of executives believe that this essential capacity is taken into account.
When it comes to having cultivated a data and analytics-first mindset and brand culture in their company, two-thirds of respondents (67%) say this is only partially resolved, while 26% feel that it is not yet the case. addressed at the company level. Only 8% believe their company has an analytical culture.
So it’s no surprise, given the lack of an analytics culture in most companies, that 70% of survey respondents give a rating of neutral (39%), dissatisfied (29%) or very dissatisfied (2%) brand analysis capabilities. Barely 2% are very satisfied while 29% are satisfied.
Most luxury brands report that they lack expertise in analytics. Only a small minority (5%) say the brand has staff with training and modern analytics skills such as data science, AI and machine learning to run their analytics. A whopping 95% say this critical need is partially met (56%) or not met at all (39%).
Only 8% of luxury brands say they use modern analytics tools like data visualization and powerful self-service business intelligence tools to perform customer analytics. An overwhelming majority of 92% of respondents said the need was not fully met (67%) or not at all met (25%).
While data collection is an area where the level of satisfaction reported by luxury companies is the highest, only a minority of brands declare themselves satisfied. However, once the data is collected, most companies report systemic failures in all elements of the data management and analytics processes and capabilities. Qualitative responses as to how data is used indicate that luxury brands use data for basic and rudimentary tasks such as measuring results (email campaign results, total sales) against generation high-performance entries that accurately define and respectfully target specific, high-propensity audiences. .
Content development is another area where data is used, but it is used in a very rudimentary way that fails to deliver personalized, sharp, and compelling content and offers that resonate with well-defined customer segments. Without the right data management and analytics skills and without the right processes in place, executives tell us their luxury brands are using data and analytics to execute what amounts to mass marketing and sale in a digital format. Luxury brands fail to innovate and create sustainable competitive advantage.
As a result of the study results, the Luxury Institute’s Affluent Analytics Lab (AAL) is offering an exclusive offer to large, medium and small brands of luxury goods and services. Led by Pedraza, who created the first CRM project for Citibank and a $20 billion A consumer goods and services conglomerate, AAL will perform a data and analytics audit to discover and determine the current state of your brand’s data collection/management and analytics processes. The Luxury Institute team includes top data scientists and expert legal advisors, formerly from Google, Forrester and other leading institutions. Our attorneys help advise on privacy laws and data rights in Washington. Based on the findings, Luxury Institute will provide actionable findings and recommendations to immediately address brand data and analytics needs and improve the team’s processes and results. If the brand chooses, the AAL team will remain as an objective advisor to the CEO or board to help oversee the progress of implementing brand data and analytics capabilities.
About the Luxury Institute
Luxury Institute is the world’s most trusted elite research, training and business solutions partner for luxury and high-end product and service brands. With the world’s largest network of luxury executives and experts, Luxury Institute has the ability to provide its clients with cutting-edge, high-performance solutions developed by the best and brightest minds in the industry. Over the past 20 years, Luxury Institute has served over 1,100 brands of luxury and high-end products and services. Luxury Institute has conducted more quantitative and qualitative research with affluent, wealthy and ultra-wealthy consumers than any other entity. This knowledge led to the development of its scientifically-proven, high-performance emotional intelligence-based education system, Luxcelerate, which dramatically improves brand culture and financial performance. Luxury Institute also pioneered the Advanced Personalization Xchange (APX), powered by DataLucent, to allow affluent consumers to license data from their digital platform to premium and luxury brands they legally trust, securely and privately in exchange for fair value rewards and benefits.
To learn more about Luxury Institute, please contact us at LuxuryInstitute.com
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SOURCE Luxury Institute