Retail is an information-driven business, and data and analytics are fuelling the industry. Analytics has become the heart of retail enterprises with increased uncertainty, market volatility, changing customer requirements, and other competitive challenges.
Being a customer-centric business, retail enterprises need to understand their customers, their changing requirements, product preferences, personalized shopping experience, etc., to attract, manage, and retain them. Business analytics harness data and provides a deep insight that helps transform the business through customer engagement, supply chain effectiveness, fraud detection, and profitability.
DefineRight helps retail enterprises enrich their customer’s experience and digitally transform them with business analytics through their Business Enablement Services Framework.
What Is Analytics in Retail?
Analytics in retail is about using big data to tackle challenges encountered due to uncertainties, market volatility, changing customer requirements, supply chain obstacles, pricing, customer trust, and other challenges. An insight into the continuous data stream helps discover how to deal with these questions and challenges. Data analytics allows retailers put the knowledge extracted from data into decisive actions to deal with changing economic scenarios, competitors, and more demanding consumers, increase their sales and drive revenue growth.
The retail industry does not work in silos & data insight helps predict and manage future performance. Business analytics can predict the next set of customers businesses can lose & reasons thereof, identify customers who can be big influencers, high-performing associates attrition, how demographic shift can impact their market share, etc.
Analytics supports their specific business function and provides a much deeper understanding of the opportunities.
The go-to-market strategies of the retail industry are expanding as it approaches customers through omnichannel models, like digital advertising, social media, email, etc. It increases the flow of internal and external data that needs to get utilized to dig out the opportunities and manage challenges.
Retail Industry Making Use of Business Analytics
The need for data analytics in the retail industry is rising because of constant change and challenges. Therefore, retail businesses are integrating data analytics and insight with their operations and strategy to stay competitive. Let us dive in to see how business analytics with advanced tools and technology can allow the industry to transform.
Customer Engagement and Management
Attracting, retaining, and improving the value to customers has become imperative for retail enterprises with the rapidly changing consumer shopping behaviors, preferences, and uncertain market conditions.
Analytics aids in assessing and determining the unserved group of customers, identifying customers with the propensity to increase spending and where their share of wallet is getting spent and why, and building models to determine and predict reasons for attrition. Accordingly, firms make changes in assortments, pricing, service behaviors, marketing communication, media plans, etc. Today’s advanced analytics with AI also helps produce simulation and planning tools to plan, anticipate, and course-correct media in a dynamic market.
Pricing and Profitability Management
Pricing requires precision at a granular level, such as stores, customer segments, and marketing channels. Advanced analytics allow retailers to measure various demand behaviors across different customer segments, identify key value items, and assess shopping patterns across channels. It assists in developing a tactical framework and setting prices based on customers, marketing & sales channels, competitors, and categories. Analytics enables to set of price points & advanced models allow elasticity at the store/item level and help retailers optimize their price daily to their sales, margin, and volume goals. Predictive analytics identifies promotion products and prices at the right time and across the product life cycle.
Pricing solutions can lead to an immediate performance improvement of 2% -4% and a sales growth of 1%-2%.
Supply Chain Regulation
Retail enterprises are now more focussed on supply chain resilience due to aggravated market volatility. With the help of AI and data analytics, enterprises are transforming their supply chain around operations planning, faster product delivery, inventory control, logistics and distribution, production, procurement, etc.
Integration of source and inventory data from multiple sources can identify items at risk of stocking out or overstocking. By using predictive analytics, incoming inventory can get shifted to the highly effective point of demand and excess inventory to alternate locations. Real-time visibility helps streamline transport operations and costs, and analysis of carriers, lanes, modes, ship to locations, and contract details aids in improving productivity and asset utilization.
Risk Analysis and Fraud Detection
The key areas that result in fraud in the retail industry are consumers, associates, service providers, inventory inaccuracies, and purchasing department. Companies are always attempting to mitigate risks arising out of factors such as contracts, duplicate charges, excessive contractor time charges, etc.
Business analytics aids in identifying the source of these frauds and analyzing unusual patterns. For instance, business analytics in collaboration with banks and retailers helps identify fraudulent activity. Point of service data mining, analyzed with a more sophisticated data stream, helps identify losses resulting from process-related errors.
Some Other Areas Retail can Capitalize Analytics for Business Enablement
As the retail industry is gradually customer-centric, analytics empowers retail with in-depth insight into high-volume data to optimize its operations and functions. Let us look few other areas where retailers can capitalize on the analytics potential and enable their businesses.
CRM Database Management
The retail industry struggles to acquire and maintain the massive amount of data they come across. BES helps organizations acquire & maintain their CRM data by storing it in one place for easy access and streamlining the transition. They use several tools and technology to track customer data, manage all endpoints of usage and collection of customer data, personalize them, store, secure, and manage them. Managing data on-premises infrastructure, hybrid cloud data management approach, avoiding data silos, etc., support effective CRM data management. A good CRM database makes integration with another database easy such as email integration, calendar integration, social media integration, marketing automation, etc.
Analytics supports retail firms in foreseeing and forecasting more accurately. The shifts in patterns of consumer data and insights like automated messaging, hassle-free scheduling, sales pipeline, marketing automation, invoices & payments, etc. are the benefits of leveraging data analytics.
Moreover, all the data and inferences can be visualized in the form of chats that can be viewed, monitored, and exported out of dynamic dashboards. Starting from inventory control to real-time customer analytics and preparation of seasonal product forecast calendar gets much easier and more accurate with operational dashboards with visualized data.
Analytics Helping Retail Enterprises to Tap into the Power of Data
Business analytics enable the retail industry to drive a more customer-centric approach to attract, manage, and retain their consumer base. Analytics helps the industry tap into the power of data to handle market volatility and remain competitive.
DefineRight a BES service provider, supports retail enterprises with business analytics services for effective customer engagement, profitability management, supply chain management, risk assessment, change management, and CRM data management.