Retail business leaders are eagerly looking for every way possible to get a leg up on their competitors, whether through an improved approach to marketing, better-targeted sales pitches or smarter pricing strategies that seek to maximize revenues. In a crowded space where everyone's looking to squeeze an extra dollar out of consumers, every little advantage helps.
While having philosophical thinkers with innovative new ideas is certainly valuable in retail, it's equally important these days to lean on analytics. Corporate leaders in the space are realizing that with a great deal of consumer information at their fingertips, and high standards for data quality to boot, they can do a lot to create competitive advantages for themselves.
According to Dataquest India, this is a key trend to watch in 2014 and beyond. Competition has always been the reality in retail, but analytics can be a true game-changer. Shwetha Tuppada and Girish Malik, senior lead analyst and principal consultant respectively at Infosys, believe that a recent explosion of technology in the world has dramatically changed the way merchants go about doing business.
"The tremendous expansion of the retail industry and relentless inflows of data from various customer touch points has led to a unique advantage for organizations - ready availability of reams of data," the two experts stated. "With advancements in information technology, organizations today are better armed to digest the data as well as to profile/validate and transform the same to useful information."
They elaborated that companies now have the ability to mine consumers insight, find links between unrelated bits of knowledge and ultimately uncover new opportunities to lock down more sales. In short, it's an exciting time to be working in retail.
Specifically, here are four key areas where companies can improve their selling strategies through analytics:
Targeting new customers
Put simply, there will be some consumers who are effectively off limits in marketing. Either they're already loyal to your brand, or they're regularly shopping with a competitor, and no amount of advertising will make a difference. But the real goal of a marketer is to find the people in the middle - the "swing voter" types who might be swayed if they're sent the right message. One benefit of analytics is finding the right consumers whom it might make a difference to target.
Discovering people's real needs
Sometimes, a merchant's offerings don't align well with what consumers are really looking for. People are on the market for a certain type of product that fits their current needs - whether technological, or stylistic, or lifestyle-based - and if they don't get it from one particular brand, they might jump ship and shop somewhere else instead. Retail analytics are valuable because they help retailers identify the most current trends and thus prevent their valued customers from slipping away.
Cutting unnecessary costs
Sometimes, there will be situations where a company is producing or marketing products that aren't selling. This may seem like no big deal, but the reality is it's a waste of resources. Time and money are being squandered on unnecessary pursuits. Luckily, analytics can be used to identify costs that aren't worthwhile and help companies eliminate them from the budget.
Data is most often viewed as a weapon to improve merchants' outbound, consumer-facing practices. Typically, it's a tool for marketing, sales and so forth. But interestingly, companies can also flex their analytical muscles with their internal practices, such as the way they budget for and allocate their labor. In reality, there's no limit to the ways that companies can better leverage their data, whether it's inside the office or out.