“Where there is data smoke, there is business fire.” — Thomas Redman.
Big data has revolutionized the way we do business. Notably, 70% of companies believe data discovery is essential for growth. Moreover, data analytics can make decision-making five times faster. The key is finding the best methods to collate, analyze, and present data in the form of meaningful and actionable business strategies.
This is where business intelligence (BI) comes in. With advanced tools, technology, and analytics, BI can deliver relevant and reliable information to the right people at the right time to optimize business performance. With its growing popularity, the global business intelligence and analytics market was valued at USD 31.39 billion in 2022 and is projected to reach USD 72.32 billion by 2030, growing at a rate of 8.45% from 2023 to 2030.
While every industry and business model benefits from data analytics, retail organizations find BI models especially useful. Retail owners gain unique insights into buying behaviors, customer attitudes, needs, pain points, and brand loyalty which is essential for business success.
In this article, we will explain how business intelligence in the retail industry helps organizations gain data-driven insights that propel them to success.
Business intelligence (BI) is a process that uses methods, software, and technology to translate raw data into meaningful insights that help decision-makers choose the best options for their business.
Simply put, “BI is about providing the right data at the right time to the right people so that they can make the right decisions” – Nic Smith, Microsoft BI Solutions Marketing.
The primary advantage of BI is clear. Organizations no longer need to sift through intricate networks of linked spreadsheets, manually analyze the data, and compile reports. BI transforms fragmented business data into well-organized and readily available formats that are easy to interpret. You can then examine your data and find the insights you need to make well-informed, strategic business decisions.
Efficient business intelligence includes concepts and tools like:
In retail, business intelligence can be leveraged to boost productivity, track consumer behavior and market trends, improve customer satisfaction, and increase revenue.
Consistent access to organized, relevant data can help discover:
Historically, vendors conduct data analysis with complex and advanced tools that organize and segregate the data. These data sets are used by experts who provide business analytics for retail organizations. However, many management sections of retail businesses may need more technical expertise to create their dashboards to derive actionable insights.
Retail business analytics now depend on true self-service BI tools that create interactive dashboards for busy managers and owners. This enables both small and mid-scale retailers to take advantage of the benefits of business intelligence without additional skilled staff or overheads required for complex analytics.
Accessible and affordable BI has helped retail owners make better decisions based on data-driven, self-service dashboards that track defined key performance indicators (KPIs). These dashboards help retail store management identify trends and better decisions about product sales, marketing, inventory, and customer behavior.
The retail business process is complex, with many moving parts and multiple touchpoints between retailers and their customers. As a result, collecting and analyzing data derived from these interactions is challenging. However, using the right methods and tools for business intelligence can contribute to a better understanding of a retailer’s operations and challenges.
To understand the benefits of business intelligence in retail businesses, let’s delve into a routine interaction between an organization and its customer. A retail chain with physical stores and online shops offers a loyalty card that customers can swipe whenever they purchase anything from the various storefronts. This data is collected in the company’s databases.
Business intelligence methods and software run analytical reports on massive customer information to create understandable and actionable reports based on consumer behavior. With these critical insights, retailers are empowered to deliver better service and boost revenue.
Retail businesses today have more competition than ever before, especially with the rise of e-commerce platforms affecting sales at brick-and-mortar shops. Having access to consumer information is no longer enough. Retailers must learn to leverage available data to stand out.
BI can offer a personalized experience for shoppers in both physical and digital shopfronts. Analytics can be used to design a floor plan that attracts and retains consumers, prompting them to spend more time in the retail space and incentivizing them to buy more goods.
In physical shops, an open floor plan with items categorized logically into well-marked aisles provides a pleasant shopping experience. With the help of BI software, retailers can check if their floor plans work well for the size of their shops and the products they carry. Analyzing various data sets can help them develop a floor plan that enables consumers to find products quickly and easily.
Sound inventory practices help retailers meet customer demands while keeping an eye on profits and overheads. It’s not enough to simply identify which products are flying off the shelves and which are slow to move. Instead, retail managers must know why consumers choose these products over others. Are they popular products because of their quality or because they’re on sale?
BI dashboards can help retailers answer these questions and plan their supply chains smartly by enabling real-time data analysis of product sales, stock levels, and delivery times.
They can also identify potential supplier issues in advance, which allows managers to make changes to their supply chain, reducing costs in the long run.
Consumer trends change rapidly, but analyzing buying behavior can help retailers create products or services that meet end-user expectations. A clear understanding of consumer preferences helps retail businesses improve customer experience with products they need or want.
Business intelligence can also help draft data-driven customer journey maps that analyze how customers interact with products, websites, or businesses. For example, they look at preferred buying times, store locations, or payment methods. Understanding this roadmap helps businesses meet customers’ changing needs to improve their bottom line.
Retail businesses can use business intelligence to analyze customer data to identify which marketing campaigns worked and the reasons behind their success. BI collects data from multiple sources for a comprehensive analysis, scouring social media, customer feedback surveys, and website analytics to analyze marketing strategy.
The analysis reveals several key insights which can be used to tweak the strategy for success. These include:
It may be challenging to understand consumer behavior that leads to success in the retail space, but business intelligence is helping retailers even out the odds.
While larger retail companies like Amazon, Lowes, and Walmart routinely use business intelligence to plan their next moves, advances in technology and tools allow even smaller retailers to take advantage of sound business data analysis. From cost-effective marketing strategies and personalized shopping experiences to profitable supply chain management and consumer behavior analysis, business intelligence is clearly making its mark in retail!
Category: Business Spotlight