Business Analytics: Why Retail Stores Should Make Use of Them

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Some time has passed since brick-and-mortar retailers began worrying about the impact e-commerce would have on their sales. With many major retailers closing their doors and online alternatives flourishing in recent years, it’s easy to see why there’s concern. However, facts and statistics don’t support the narrative that retail is dying.

As it currently stands, e-commerce accounts for approximately 10% of all retail sales and, according to Forbes, that number won’t get much higher than 20% for at least a few more years. At the same time, online giants like Amazon are investing heavily in ventures like Amazon Books, Amazon 4-Star and their acquisition of Whole Foods.

Additionally, the likes of Walmart, Tesco and other major retailers are doubling down on their investment in physical premises, despite having their own online storefronts.

Brick-and-mortar retail isn’t leaving – it’s merely evolving.

Perhaps more importantly, physical businesses can leverage the technologies that digital has brought to the table. One such example is analytics and business intelligence (BI), which has helped e-commerce retailers optimise their offerings, promotions and price points to create a highly personalised customer experience that keeps buyers coming back.

Brick-and-mortar retailers can also take advantage of the technology, albeit in a slightly different way.

Customer Experience

The fundamental advantage of analytics is its ability to help retailers learn more about their customers. With that, they can strategically adjust how the store looks, feels, and is laid out, as well as interactions with staff. Physical retailers already have the upper hand when it comes to customer experience, and BI can help them lean into that.

A great example of this is Samsung’s Nexshop Behaviour Sensing technology, which can capture and analyse information about customers in a store, such as flow, behaviour and demographics. This allows managers to allocate staff in a way that’s conducive to making more sales or bringing awareness to a promotion.

It’s not merely a matter of finding ways to push customers to buy products. Analytics is also there to make customers want to come back by providing an experience they enjoy.

This is what many physical retailers thrive off of, and something that analytics will only further improve.

Access to Resources

Nexshop Behaviour Sensing is just one of the countless ways that today’s retailers can learn more about their customers.

  • Modern POS systems provide a wealth of data not only on customers, but also staffing and operations.
  • Email marketing software can help retailers by getting in touch with customers and learning more about them.
  • Retail analytics software like Datapine, RQ and Numerator Insights are affordable and readily available.
  • Stores can gather a wealth of information from conversations, quizzes, surveys and other capture methods.

What’s more is that retailers can hire talent to do a more effective job at learning about customers and identifying ways to leverage findings. This is thanks to online degree programmes specialising in data analytics. One such example can be found at the following link: https://studyonline.aston.ac.uk/programmes/msc-business-analytics-online.

Personalisation

Analytics can help physical retailers improve and iterate their customer engagements with an accuracy and velocity that far exceeds traditional approaches. BI can empower staff with knowledge about individual customers, their purchase history, preferences, habits and so forth. This can help staff provide targeted advice at the right time.

To contextualise this point, consider a digital sign or kiosk that uses a rule-based engine to display ads that are tailored to the demographics of whoever walks past it. So, when a young group of people approach the sign, it will recommend products depending on their interests. This, of course, can have a significant impact on engagement.

Operational Improvements

It’s not only the customer experience that can be improved by analytics. BI can help retailers make operations run more efficiently than ever before, as well as reducing expenses.

  • Managers can staff their stores in a way that complements the ebb and flow of foot traffic.
  • They can ensure that there are just enough employees around to keep customers happy and satisfy the needs of the store, but not too much that money is being wasted on overstaffing.
  • Eliminate time spent on research, discussions and traditional means of collecting data.

Marketing is another area that can benefit from data-driven decisions and help retailers obtain a better ROI on their marketing efforts. Resources can be allocated more efficiently when stores know how customers will respond to a given promotion. The location and context of promotions can also be adjusted depending on the date and time.

It doesn’t end here though, as there are a range of additional internal improvements that BI can help retailers make.

Floor Plans and Product Placement

With limited floor space, retailers need to ensure that every square foot is generating the maximum possible revenue.

Analytics and BI takes the guesswork out of making this happen. Using insights, BI can help store managers:

  • Use ‘dwell-time’ to identify where customers spend the longest.
  • Find slow-moving and poorly performing products or areas.
  • Identify ineffective displays and promotions that don’t attract customers’ attention.
  • Drive foot traffic to the right places.
  • Keep customers in the store for longer.
  • Bring more foot traffic towards less popular areas.

Depending on the technology used, the amount of data obtained can vary and with it, the actionable insights store managers can use to improve the layout of their premises.

Conclusion

While capable of providing astronomical benefits to almost every aspect of running a retail store, these are just some of the countless ways in which retailers can potentially benefit from analytics.

Analytics and BI can help physical retailers provide a more personalised, engaging and customer-friendly experience while also providing a range of operational and efficiency improvements that save time and money.

With the technology being so accessible, now is an ideal time for brick-and-mortar to leverage the techniques that have helped e-commerce flourish.

What’s more is that the technology will only improve moving forward. It won’t be long before new data inputs, such as wearables on sales staff, will be able to bring the intelligence of retail on par with, or even exceed that of online.

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