To improve your company's performance, think about data science

A well-conducted data strategy can improve several performance metrics of an organization, says Olivier Kuziner, Managing Director APAC of Ekimetrics. Data science sometimes seems abstract, but its business impact is significant, as demonstrated by an example in the Chinese luxury industry.Long confined to marketing, data science has crossed boundaries to create value throughout the company. Data scientists are now enhancing production, supply chain, and sales. Once you have mastered marketing performance, you must consider customer strategy, followed by data strategy in the broadest sense.At first glance, marketing performance is reasonably simple: if I invest one dollar, what will be my return on investment in terms of sales increase? The channel, the message, and the timeframe influence this gross return on investment. However, measuring the impact on brand image is also essential, an increasingly important topic for luxury companies, with the paradigm of arbitrage of the investment to convert in the short term (sales) and build the long term (brand).To calculate profitability, you need to quickly analyze different operating costs, particularly those of the supply chain or consider retail store rents. If performance measurement is slowed down by the complexity of information systems (heterogeneity of systems or their obsolescence), its implementation is possible with the right data approach. The combination of a "strategic" marketing plan with data science techniques and adapted cloud technologies is a guarantee of success.Customer strategy is about determining customer behavior, finding the best ways to target them to enhance the quality of their experience, and ultimately creating value with them. The use of data completes the implementation of these actions while paving the way for business transformation: what are the moments in the customer journey where data delivers value? How can you rethink customer decision-making and procedures? Where should you start? Which technologies should be implemented to accelerate this?Practically speaking, the success of a first action is a prerequisite for the next one, even if it means starting the cycle all over again to achieve a virtuous loop.China, which has just lifted lockdown measures, is fertile ground for implementing this data. For example, a prominent French luxury brand has developed an algorithm to predict sales by product and point of sale. In addition to improving financial performance (cash flow and investment), the solution allows the company to optimize its merchandising and supply chain. In this particular case, the Finance, Merchandising, Supply Chain, and Data teams were aligned on a common objective, while inventory optimization and sustainability issues were respected. The second part of the Chinese project consisted of optimizing marketing performance to understand the growth levers, both in the domestic market and in the travel retail segment, sales in the Duty-Free areas of China.China remains a growth market for luxury in Asia, but South Korea and Japan are seen as two expert markets where more service is needed. In China, companies are looking to measure the effectiveness of their marketing investments on different channels such as Douyin, Red (Chinese Instagram), or Weibo (Twitter-like social media), keeping in mind the building of their brand reputation in the long term. However, some influencers promote a perfume, then two minutes later, toilet paper, then two minutes later again, a lampshade. These channels are very promotional and based only on moderate or even low prices; they must be controlled to not deteriorate the brand's pricing power in the long term.