Business intelligence and Analytics in Retail Industry
Business intelligence is simply the assembling of various data pieces such that it can be used as a reference for formulating marketing strategies. It involves understanding the working of a business system and organizing the merits and de-merits of the plan. BI today is a technology-driven process which collects and assembles data, making it ready for analysis.
Data intelligence comprises of organizing and analyzing data for future endeavors and to expand the business. The internal and external data is gathered and carefully studied to find out the loopholes and make more informed decisions in the future. Data intelligence includes activities like Business performance, data mining, online analytics, and event processing.
Business intelligence and data intelligence is about transforming data into information, information into knowledge, and knowledge into 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 these needs of the customer 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 who 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 the customer to shop at any 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. These charts can be used by the companies 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. On the basis of these patterns, the companies can promote different schemes and offers. For example, after careful data analysis, the companies can narrow down products which 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 get an idea as to how much they should stock up on a particular product.
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 on the basis of 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, on 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 decided to play any sport.
Data intelligence can be used to generate personalized communication for the customers using their past purchase histories and area of interests. Rapidops have used data intelligence to generate weekly special emails with personalized offers for a reputed retail grocery chain in United States. This implementation sends more than 800,000 emails per week with data intelligence driven personalization in each email.
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 woman. Hence, they strategically placed 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 which has embraced and internalised 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. This reduced the deli
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 consideration 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 is indeed exemplary!
In a nutshell…
The main strength of a company lies with its people and its data. Business intelligence urges the companies to empower their people using the data at hand. Improvising on 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.
An ardent fan of reading thought provoking and inspiring materials, Nirav applies his experience of around fourteen years in the IT industry for writing about technologies and their successful application in the daily life.