Operations in the retail industry have become extremely fast-paced and competitive. For every company that's looking to sell a given product, there are likely a dozen rival businesses looming in any given market. It's exceedingly difficult for one merchant to separate itself from the pack and reveal a unique value proposition to consumers.
That's precisely the challenge that companies face, though. Striving for sales success through one-off purchases is not a sustainable strategy. In order to really get ahead of their competitors, retail companies are aiming to lock in loyal customers for years to come. The goal is for businesses to distinguish themselves through superior approaches to marketing, sales, customer service and more.
These days, retail decision-makers are concluding that analytics are the key to making improvements. With the massive amount of information that's out there today, pertaining both to internal workflows and external sales factors, it's difficult to consider the full picture without leaning heavily on data. Companies today aren't just focused on solid one-on-one relationships with customers - they're also reliant on data quality.
According to Information Week, attention to analytics is going to be a chief factor that helps retail companies set themselves apart in the coming years. Arvind Nagpal of TEG Analytics speculated that if retail organizations can used data-driven models to simulate the sales environment, they can sharpen their approach to business.
"The future of analytics is focused on bringing the science of analysis with the art of decision-making as compared to most analytics companies that create standardized reports from data," Nagpal stated. "Simulation and optimization are advanced capabilities that not only require a strong mathematical base but also a deep understanding of the business context of the client being serviced. The next few years in the industry are going to reward these players that bring such capabilities to large and small businesses."
Specifically, here are four ways that companies can use analytics to fine-tune their approaches.
One thing companies always need to know is how much of each product they have available to sell. Analytics can be used to model stores' inventories and not only measure what's on hand now, but also predict what will be on the shelves later. Retail leaders can use analytics to track inventories and adjust sales strategies based on what goods are in stock.
Modifying marketing tactics
No company can subsist by sticking to the same marketing strategies year in and year out. Adjustments are part of the process, and it's important for retailers to keep up with trends. Nagpal suggested, for instance, that sporting goods companies can monitor what jerseys and equipment items buy from season to season. Having high-quality data on purchasing can go a long way.
Improve brick-and-mortar sales
For sellers that rely on customers who shop in person, it's important to make good decisions about brick-and-mortar sales locations. Where will you put the next store? It depends on a variety of factors - real estate costs, demographic factors and the risk and reward associated with each candidate place. Analytics can be used to weigh potential locales and make the best possible decision.
Sharpening e-commerce tactics
Increasingly these days, people prefer to make purchases online. Analytics can be used to predict exactly how. What devices are people shopping with? What tools do they use to communicate with their favorite brands? What content on the Web do they find compelling? If retailers use data to track all of the above, they can better appeal to customers and ensure more sales over the long haul.