Business Intelligence and Analytics in Retail Industry

Business intelligence is simply the assembling of various data pieces such that they can be used as a reference for formulating marketing strategies. It involves understanding the working of a business system and organizing the merits and demerits of the plan. BI today is a technology-driven process that collects and assembles data, making it ready for analysis.

Data intelligence comprises organizing and analyzing data for future endeavors and business expansion. The internal and external data is gathered and carefully studied to discover the loopholes and make more informed decisions. Data intelligence includes activities like Business performance, data mining, online analytics, and event processing.

Business intelligence and data intelligence transform data into information and value.

Why do we need these in retail?

In the fast-paced life of the twenty-first century, consumer demands and needs have skyrocketed. What really are these consumers looking for? The answer is simple - Instant gratification, impeccable services, and the latest products to keep pace with the ever-changing trends.

Data Intelligence is required to understand the customer's needs for a better buying and selling experience. If analyzed properly, such analysis can take you as far as predicting what the customer requires next. Companies that can identify their potential customers and broadly understand their requirements are already far ahead of their competitors.

How does this technique work?

Online shopping has quickly gained popularity because it enables customers to shop at odd hours and from any place in the world. Business Intelligence tools access the customer's historical search data and their recent and most frequently searched products.

BI reporting tools such as Power BI generate customer analytics reports to show customer trends in the form of charts, making it simpler to assess and analyze customer characteristics. Companies can use these charts for introspection into their business over the years. It can be used to determine how well a product has hit it off in the market or what the current popular customer demands are.

How can this data be exploited for maximum benefits?

Apart from giving an insight into the company’s progress and sales over the years, this data can also be analyzed for various other uses. After tracking every click, every product viewed, and every product bought and discarded by the customer, there emerges a pattern.

Based on these patterns, the companies can promote different schemes and offers. For example, after careful data analysis, the companies can narrow down products that are most likely to be purchased together. These products can then be sold with a scheme of "buy one get one free." The companies will also know how much they should stock up on a particular product.

Smart advertising

Online shopping websites like Amazon and eBay use data intelligence for smart advertising. They keep a record of what a particular customer searches for and purchases. They advertise their other products based on the customers’ recent searches.

For example, let a person buy a book of Harry Potter from the website. The site will then bombard the customer with offers on other Harry Potter books and merchandise, other books of the same genre, and other works of the same author.

If, for example, a person does not make a purchase but searches for cricket sets, tennis racquets, and other sports equipment, then the site has a different strategy. It will come up with different kinds of offers on various varieties of sports equipment to ensure that the customer finds what he is looking for. It will also advertise merchandise like sports shoes, headbands and wristbands, sports outfits, and so on, which the customer might need if he/she decides to play any sport.

Smart communication

Data intelligence can be used to generate personalized communication for the customers using their past purchase histories and areas of interest. Rapidops have used data intelligence to generate weekly special emails with personalized offers for a reputed retail grocery chain in the United States. This implementation sends more than 800,000 emails per week with data intelligence-driven personalization in each email.

Retail Revolution

Many stores and companies have embraced data intelligence and made spectacular changes in their outlets. One of the retail stores discovered that men are more likely to buy nappies rather than women. Hence, they strategically placed a beer outlet next to the nappies section in their store. And in a matter of a few months, their beer sales noticeably shot up! Seems miraculous, right?

Amazon is a company that has embraced and internalized data intelligence with open arms. Recently, Amazon started predicting what the customers were likely to purchase next. Accordingly, they shifted around their stocks so that the desired item was available at the outlet nearest to the customer's location.

Amazon Go is the future face of retail. It is a store without a check-out or billing counter. Well, how do the customers pay for the products then? They simply walk out with the products they like. Integrated cameras, weight scales, pressure sensors, load cells, etc. record the entire shopping process determining what people take off or return to shelves along with the considerable time taken to read, analyze, consider, select or put back a product. In short, the data provided by all different sensors or input devices, help generate customer behavior intelligence which can, in turn, be used to make accurate predictions and boost sales. The way business and data intelligence is used here to completely revolutionize the face of retail are indeed exemplary!

In a nutshell…

The main strength of a company lies with its people and its data. Business intelligence urges companies to empower their people using the data at hand. Improvising its data handling mechanism is the most significant internal revolution that a company can make. Knowledge is power; proper data analysis will empower the companies to make better schemes and sell their products smartly. By exploiting this technology to the maximum, perhaps we can turn the vision of drones zooming through the skies to deliver packages that haven’t even been ordered yet, into a reality.

Recommended Readings:

Self-Service BI – A New Dawn of Data Analytics

Importance of Data Mining and Visualization Skills