Retailers are operating in a highly competitive and fast-paced environment, which means they are always looking for an edge over their competitors. Retail business intelligence can provide just the edge they are looking for.
The retail industry and business intelligence are all about information. It provides insights into how customers interact with online and even physical stores. This data can be used to improve the shopping experience, increase shopping carts and open up new revenue streams. Many innovations that have been launched in recent years were built on retail analytics and business intelligence, e.g., auto-recommendations presented to eCommerce customers based on previously viewed items.
Retailers can use the information they gather to make smart decisions about their business. Data can be viewed in real time so that changes to prices and merchandise can be made immediately. Data gathered in mobile apps, or online can also be used to improve real-world stock decisions.
In this article, we’ll look at the many advantages of business intelligence in the retail industry.
Retail business intelligence: The benefits of business analytics and business intelligence solutions in the retail sector
Brands can use retail business intelligence to deliver better customer service, earn more revenue than their competitors and even improve their operations, e.g., through improved stock management. Business intelligence in the retail sector can include information about sales, market trends, customer behavior, needs, and more.
The application of business intelligence in the retail industry can deliver the following benefits:
- Improving business operations
BI tools will provide retail businesses with even greater control over their operations so that teams can keep track of what’s going on in the company. This means they can spot and correct errors or take advantage of new opportunities very quickly. For example, they may pick up that medium-sized clothing sells out quickly, while extra-small clothing isn’t very popular. They can adjust their ordering so that there’s enough stock of medium-sized clothing and only limited stock of extra-small clothing. This not only increases sales but reduces dead stock in the company. Retail BI can also be applied to deliveries, e.g., to determine which elements cause delays in delivery, so it can be improved. Another impactful tool within the arsenal of BI that retail businesses can leverage is the drill up and down in BI feature. For instance, a retailer could delve into the labyrinth of sales data, unearthing the popularity of different clothing sizes across specific stores or regions before ascending to a more panoramic view of sales patterns across all stores. Such functionalities enrich the process of data analysis, infusing it with flexibility and interactivity, thus empowering businesses to comprehend their operations more profoundly and react with agility to evolving trends or challenges.
- Improved Customer Service
Customer service is the key to success. Unhappy customers not only won’t come back, but they can also lash out at employees and post negative reviews, which can impact the business in the longer term. Offering great customer service isn’t always easy. Expectations are often very high (and sometimes even unrealistic). BI can mitigate these issues by offering information about customers’ wants and needs. By studying how customers interact with products and sites, companies can make improvements to the entire customer journey. For example, you may find that a vast majority of customers will add items to their cart but won’t checkout or will checkout at a later stage. You may want to introduce a wishlist feature or AI assistant to push them over the line.
- Improved Inventory Management
Inventory management is very important to retailers. Inventory management refers to all of the activities that relate to stock handling, from sourcing stock to storing and selling it. Companies that overstock or fail to track their stock properly will inevitably suffer losses. Overstock takes up valuable space on retail shelves and in warehouses and will have to be sold at a loss. Not tracking stock leads to shrinkage, damage, and theft. BI can change that by providing insights that will help retailers maintain optimal stock levels, keep inventory costs low, and improve order management.
- Improved Understanding of Consumer Trends
Consumer demands and wants change all the time. Trends always change in the fashion industry, but this can be true for all retail sectors. Think of how many “superfoods” came into vogue recently or how more people started examining hygiene or environmental credentials after the COVID-19 pandemic. By studying search behavior on the site, you can identify patterns in your customers’ behavior as they emerge. BI provides insight into products that are in demand that you stock and that you don’t have yet stock, so you can tailor-make your online and brick-and-mortar store accordingly. You can also study how customers respond to changes in pricing or packaging.
- Improved Store Floor Plans
Shopping can be a stressful experience and a real hassle. Retailers need to create floor plans that keep shoppers browsing for as long as possible. Believe it or not, BI can do that. By analyzing movement through the store using Bluetooth sensors and mobile apps, you can find how customers move from shelf to shelf, which displays catch their eye, and which products appeal to them. They can even track how often a shopper returns to your store and can serve surveys to customers to find out even more about their experience.
- Tailored, Targeted Marketing
Marketing is all about insights. You can use social media and online stores to gather a huge amount of data about your customers, but analyzing that data can be a challenge. BI can spot trends and patterns that can make your marketing efforts even more effective and then determine whether or not your new strategies have paid off.
BI analytics will provide insights into shoppers’ preferences, attitudes, and interests so that you can create advertising and marketing campaigns on the right platforms that speak to the right customers at the right time. A retailer that wants to capitalize on Facebook ads can use the metrics and on-page actions to create a more tailored campaign, for example, or to make improvements to newsletters or websites.
- Create a more efficient supply chain
Supply chains are highly complex. Numerous vendors and merchants are involved, which complicates sourcing, distribution, stocking and more. This can easily lead to inefficiencies creeping in. Entire departments may underperform at one time or another, and some relationships can become unprofitable without you realizing it. BI can gather and analyze insights from day to day operations. You can create forecast models, identify logistical bottlenecks and meet organizational KPIs with ease.
There are many more advantages to using retail business intelligence. To find out more, take a look at this article, or schedule a demo with a BI provider for more information. It could change your business for good.