Retailers that develop an integrated IT infrastructure gain the ability to gather, analyze and leverage valuable data that can drive improvements across business processes. In particular, data-driven insights give retailers an unprecedented understanding of user behavior and motivations — essentially providing stores with the keys to deliver an optimal customer experience.
Retailers can derive several competitive advantages by applying analytics to data about customer presence, many of which stores may already be capturing. These range from customers’ social media sentiment to their time spent in the store.
Data-driven insights go well beyond simply tracking trends. Analytics can yield efficiencies in day-to-day operations that directly translate to cost savings and competitive advantage. The range of potential retail data analytics applications can include the following:
1. Gain Insights on Key Market Trends
Predictive analytics lets retailers understand current and future market trends to achieve more accurate financial results. This positions retailers to make better decisions around staffing and growth, and it can prevent situations where stores miss sales targets as a consequence of poor forecasting capabilities.
2. Meet Customers' Expectations on Access to Inventory
Best-in-class inventory management, supported by radio-frequency identification (RFID) technologies, can extend inventory to full customer transparency. Customers are developing the expectation that they will be able to quickly and easily see what’s in stock at a particular location via a store’s website or mobile app.
Maximizing this capability can help retailers increase brick-and-mortar sales, online sales and cross-channel sales, such as opportunities in buy online, pick up in store (BOPIS). Internally, data analysis and predictive analytics enable retailers to maximize distribution, inventory management and purchasing power.
3. Target Customers with Tailored Marketing
Data analytics built around omnichannel programs and multiple data points gives retailers a comprehensive understanding of their target market. While customers want retailers to deliver a valuable, tailored shopping experience, stores must also be wary of bombarding them with offers or making them feel that stores are watching their every move.
Still, there is evidence that shoppers are growing more accustomed to targeted messaging, and many are willing to trade a bit of privacy and anonymity if this results in a more productive visit to the store.
4. Make Mobile Apps More Useful
These tools serve multiple functions for retailers, from meeting customers’ expectations for a personalized, proximity-based digital experience to delivering location-based analytics. As customer adoption of retail mobile apps increases, these tools have the potential to become an even more important source of two-way communication.
It’s clear that data analytics has the potential to help stores alleviate numerous pain points while creating additional value. But to take advantage of this potential, retailers must have a connected system in place to capture, share, secure and analyze data. The most effective smart retail deployments start with retail leaders identifying long-term goals and then creating the technology systems that make it possible to achieve them.
Find out how retailers can embrace digital transformation strategies to drive productivity, efficiency and a better customer experience.