Leveraging data analytics to survive and thrive in retail
By Andrew Bithell, Sales Team Lead at CTS
Retailers can leverage understanding customer data in a number of ways. From tracking consumer behaviour to identifying high selling products, and determining areas for improvement online and in store, data is becoming increasingly important for retailers as the industry becomes more competitive.
For retailers to stay ahead of their competitors and provide an improved shopping experience for their customers, harvesting insights into what their customers want and need is essential. Andrew Bithell, Sales Team Lead at CTS, discusses how digitally savvy retailers are leveraging cloud-based, cross-functional data sets and analytics to reshape entire retail operations through highly targeted optimisation.
Maximising Collaborative Business Intelligence
Despite the need for retailers to understand and respond to changes in customer behaviour already existing, today’s consumer activity is more nuanced than ever before. In today’s economic climate, shopping behaviours are being directly impacted by the rising cost of living. Accelerating prices lead to an increasing variety of product types, deeming some retailers – and some categories – more vulnerable to recessionary conditions.
The increase in digital empowerment means retailers are exploring more advanced Machine Learning (ML) and Artificial Intelligence (AI) techniques to adopt a more refined process to peak season forecasting.
Advanced analytical tools generate the opportunity to reevaluate all aspects of a retailer’s operations. Retailers can now review pricing decisions at SKU level in granular detail, enabling them to not only to decrease warehouse stock and to improve supply chains, but also to optimise customer experience, increase margin, and hit sustainability goals. And, through this insight, the customer experience and retail performance are being transformed.
The Power of Cloud-Based Analytics
From decreasing infrastructure and storage fees to generating real-time access to inventory and operational data, cloud services can be beneficial to the retail industry in a number of ways:
- Stocks and insight traceability: The ultimate budgeting headache lies in over or under stocking, which impacts business profitability. This issue can be eliminated with cloud by tracking inventories at all stages without the restrictions of traditional systems.
- Managing Warehouses Remotely: Businesses can maintain offsite access to all inventory locations, live inventory volume, location of delivery centres, and more when migrating to cloud software.
- Cloud Management in the Supply Chain: Manually keeping track of inventory requires a lot of human time, but inventory management, order placements, and requisition are automated with inventory in the cloud.
- POS updates: Instantaneous inventory updates from back-office system to POS (integration between POS & back-office).
Organisations are leveraging the ability of the cloud to combine and analyse diverse information resources quickly, as well as harnessing the extraordinary wealth of data generated by real-time supply chains and customer behaviour. A specific business area no longer limits insight – such as the point of sale or warehouse. Thanks to powerful analytics tools, a retailer can now understand the business, not only at category or store level, but down to the individual consumer experience.
Optimisation and Priorities
Ever more accurate predictions and forecasts are being fueled by customer behavioural data. Harnessing analytics tools means peak season is no longer consumed with maximising (often discounted) sales, but exploiting the additional customer traffic to overcome a key business issue.
Retailers are also able to ask more complex questions due to this cross business insight. To decrease the fee of storing aged stock, could it be more cost-effective to sell off additional goods? Does the inherent value of the stock guarantee that despite the cost of storage, the margin will hold up long term?
Logistics is the priority to most retail operations, with the use of advanced analytics being targeted to optimise the transportation of containers into the UK and then to stores in the most effective and sustainable way achievable. Data is driving strategic planning to improve forecast demand, plan inventory requirements, automate processes and estimate logistics needs.
Utilising these analytics also enables retailers to attract shoppers in a different way, whether that is to take a more intelligent approach to localisation or to use offers to bring shoppers into stores and expose them to different product lines. Consumer expectations are now being set by those retailers using data to create a more compelling offer and be more exciting.
Additionally, profitability is being safeguarded. Dynamically updating pricing for the most optimal sales and revenue targets requires monitoring multiple rapidly changing variables for retailers, such as consumer demand for select products and the pricing offered by competitors.
Conclusion
Data analytics has the ability to transform the entire peak season event in a way that echoes each retailer’s specific business when utilising the right skills and correct inference. Whether it’s boosting customer loyalty or increasing brand image by delivering customer satisfaction, or decreasing costs by cutting wastage and improving productivity, it doesn’t matter. Data analytics are fundamental to transforming retailers’ profitability.
