In the last few years, competition has certainly intensified in the retail sphere. The significance of retail analytics has been growing and does not appear to be slowing down soon. Retailers have consistently enjoyed an increased return on investment because of using analytics tools. Not only has it allowed them to enhance the customer experience, but do so at minimum operating cost. As a result, the analytics market is set for a whopping growth of 114% between 2016 – 2020, exceeding US $7 billion. With retail analytics, retailers get access to deeper customer insights across the entire chain of retail operations.
Let’s see how the retail analytics framework can help structure its’ programs in the areas of marketing and store operations.
Retail Analytics – Enhancing marketing initiatives and decision
Analytics fosters the prospect of effective marketing and meet customer demands and expectations. Retailers could do with deep customer insights collated from the various point of sale systems, loyalty programs, social media, etc. This will help them engage with their customers through targeted interactions and personalized offers. A couple of key areas that can be determined through marketing analytics is pricing and promotion. Pricing is one of the most crucial factors that influences the shopping destination of the customers. Good pricing at a store certainly entices customers to consider shopping there. The following figure clearly indicates the same.
The only way to establish customer loyalty is by providing customers with a personalized shopping experience. Retail analytics helps achieve all that and more. Predictive analytics allow retailers to understand the past performance of the customers, and thereby predict the kind of behavior that they might exhibit in the future. Based on the data, the customers’ shopping journey can be personalized with relevant and targeted offerings. Basket analysis will help retailers understand the types of products that a customer usually resorts to in terms of price mainly. This will enable them to place customers into certain segments based on the analysis. Each segment, then can be targeted with unique discounts and tailored offers. Promotion is a huge facet of marketing today. The same promotional strategy will not work for every customer. Promotion needs to be in sync with the demands, expectations, and lifestyle of the customer. Leveraging the power of analytics to the fullest, indeed enhances the overall marketing initiative and decision making of retailers.
Optimizing Store Operations because of increased transparency
Retail analytics also help in optimizing store operations that yield greater results. Often, retailers are in a fix with regards to the perfect size of staff required for the store. While it’s important to have ample number of associates for customer assistance, retailers also must also avoid unnecessary personnel and cut costs. Various analytical models help retailers forecast demand based on seasons, events, festivals, etc. This allows them to optimize the staff roster accordingly.
The deployment of proximity sensors on the shelves and throughout the store, along with the installed cameras helps in turning data into meaningful insights. Sensors on the shelves help retailers determine the levels of inventory available. The sensors placed at the store, along with the cameras provide important data about shopper movements inside the store. The places in the store with the maximum/minimum amount of customer footfalls, across various times of the day/week can be easily tracked. Retailers can then accordingly deploy the number of associates required in an area. This will also allow retailers to provide better customer service and assistance to the shoppers. Knowing the areas that generate the highest traffic will also help them position their products better.
The retail environment is ever-changing and highly competitive. To gain any competitive edge, brick-and-mortar retailers must always look to satisfy the demands that customers have. Providing a one of a kind shopping experience is a must. Especially now that there are so many shopping options that are available for customers. Retailers already are and will continue to leverage retail analytics.