Data Sharing, Elevated Analytics Driving ‘Tectonic Shift’ in Consumer-Led Retail Growth

Long before there were computers and digital databases and online and in-store shopper analytics, the art of “selling consumers what they want to buy” had been a core tenet of the retail industry.

While advertising, and now social media influencers, still play a role in shaping that end demand, the modern method of determining what goes on a retailer’s shelves at what price, is undergoing a massive period of change and technological advancement. Thanks to an unprecedented symbiosis of better analytics of consumer behavior, retailer insights and manufacturing know-how, this era of shared data is being put to work in all new ways.

“This tectonic shift will bring retailers and manufacturers closer together in the form of listing decisions, to assortment planning, to supply chain management, to marketing and promotional planning,” James Hunt, VP of client service at NielsenIQ — the world’s leading retail measurement and consumer analytics firm — told PYMNTS.

His comments come in the wake of Tuesday’s (Jan. 11) tie-up between Nielsen and Sally Beauty, the personal care and cosmetics chain with over 4,700 stores, that will see the two industry leaders integrating insights and elevating analysis of $2 billion in sales with the aim of unlocking new revenue for both the retailer and manufacturers.

As much as the beauty and personal care industry has already undergone substantial disruption and change over the last three to five years — including the digital shift effects of COVID — Hunt said retailers, including Sally Beauty, are adjusting their business models and leveraging more robust analytics.

The result, he said, is deeper, better informed, buying decisions, from “shopper behavior in brick-and-mortar stores to who is winning with online shopping, from regional product selection decisions for Black and Hispanic shoppers to localized pricing.”

Out-Maneuver the Competition

With over 7,000 hair, skin and nail care products in its stores from scores of different brands and manufactures, Sally Beauty clearly has a lot to consider when it comes to deciding what to stock and what to clear out.

While the beauty industry has traditionally been heavily influenced by marketing promotions, the coupling of market insights, shopper behavior diagnostics and retail analytics is allowing forward thinking retailers to out-maneuver their competitors, while also winning favor with their suppliers.

To be sure, the competition is not sitting still. In the past few months alone rival Ulta Beauty said it was adding or remodeling dozens of new stores, formed a delivery partnership with DoorDash and announced a 100-location store-in-store pilot program with Target earlier in the year that it plans to scale to 800 in coming years. Not to be outdone, Kohl’s and Sephora have also recently expanded their own beauty partnership. In each case, though, all of these steps have been aimed at getting closer to the consumer and being able to serve them more quickly.

By all accounts, Sally is up for the fight.

“We are thrilled to begin this new relationship with NielsenIQ and begin employing their comprehensive merchandising tools … with business intelligence and real-time capabilities,” Sally Beauty Chief Merchandising Officer Pamela Kohn said in the statement.

With headwinds blowing across the industry, competition rising and customers more digitally nimble and active than ever before, it seems clear that the time was right to shake things up in the way retailers fill their shelves.

“Our new relationship [with Sally Beauty] comes at a critical juncture with the beauty and personal care industry focused on consumer-led growth,” said Tara James Taylor, SVP beauty and personal care vertical at NielsenIQ.