Retail business intelligence: 4 tips from BI experts to boost in-store sales
Data is fueling retail these days, adding a new dimension to understanding and anticipating customer needs. To maintain footfall and keep the edge, traditional brick-and-mortar operators should start creating customer experiences that extend beyond the physical space.
They may do it by harnessing the power of business intelligence and analytics. But how exactly? We asked our BI development consultants to share empirical insights.
Tapping into new retail
The concept of new retail was first brought forward by Alibaba founder Jack Ma. It describes the vital need for the integration of online and offline shopping to create one experiential retail environment. This promises to boost sales through enhanced customer engagement.
The strategy assumes immersive adoption of technologies at every stage of the retail value chain and puts data analysis at the heart of retail transformation.
By assembling and analyzing exhaustive information about products, sales, prices, promotions, and consumers, retailers can accurately anticipate customer needs and adopt the right strategies to meet them. To that end, they need to embrace massive pools of data, collected from a variety of internal and external sources.
Everything starts with the insights
Data alone won’t drive sales; it needs the intelligence. Progressive BI tools capture all consumer activities, track sales and inventory metrics, and apply advanced analytics to reveal insights about the buyers, sales, and inventory. These insights may then support strategic and tactical retail decisions that drive greater revenue.
As input, BI retail solutions gather a breadth of information collected from CRMs, databases, emailing systems, beacons, wearables, PoS terminals, and other sources. As output, they not only generate reports that depict the current state of affairs but also enrich them with advanced analytics, natural language processing queries, and sophisticated machine learning algorithms. The latter are necessary to provide data-based predictions that retailers may use to improve specific operational aspects, encourage customer loyalty, and stimulate purchases.
Business intelligence insights may power the following sides of a retail business:
- Knowledgeable, customer-centric staff. By investigating various ways of how customers interact with stores, products, and promotions, BI systems endow frontline staff with in-depth customer knowledge, which in turn helps personalize in-store service and increase basket value.
- Immersive customer experiences. Thanks to business intelligence solutions, retailers gain the capability of crafting unique experiences at every stage of the customer journey. By leveraging customer data, they may also enable self-service for buyers who prefer independent shopping over interaction with assistants.
- Targeted marketing campaigns. Marketing is all about reading into one’s business audiences. BI tools give retailer brands the power to build strategies around unique information such as buyer pain points, purchasing patterns, modes of brand interaction, and others. Additionally, business intelligence solutions facilitate marketing benchmarking, allowing for identification of the most and less profitable practices.
- Efficient inventory planning. Finally, retailers may take advantage of BI insights to enhance inventory control by minimizing stock-outs, reducing misplacement, and preventing inventory build-up.
Tip 1: empower shop floor staff
Retail business intelligence solutions create new opportunities for sales teams to increase performance and build customer loyalty. Interrogation of customer histories captured through PoS and CRM applications, aggregated within a BI database, can highlight shoppers’ behavioral patterns and preferences.
This intelligence can assist sales associates with a better understanding of customers’ interests, purchase history, and shopping habits, enabling targeted in-store recommendations.
While ecommerce continues to grow globally, it still accounts for less than 15% of the total retail revenue. Indeed, when it comes to the overall shopper experience, in-store retail still resonates with consumers more than its online counterpart does. A considerable number of buyers still value the face-to-face assistance and advice they receive from in-store sales staff. They also appreciate receiving their purchases on the spot, rather than waiting for delivery.
By extending the possibility to capture and analyze data about customers in-store, business intelligence applications can help retailers capitalize on these and other strengths inherent in the brick-and-mortar retail channel.
Tip 2: create immersive customer experience
An Epsilon research shows that 80% of frequent shoppers only shop with brands that offer a personalized shopping experience. Individualized, high-touch customer service is no longer a nice-to-have but an essential requirement for retailers seeking to secure continued growth.
The ability to aggregate structured and unstructured data has become invaluable for understanding and envisioning customer needs. The network revolution has created a new breed of well-informed customers whose shopping choices are motivated by far more than just the best price. They are now seeking a closer connection to brands and a curated shopping experience. That’s a niche that traditional retail outlets can fill thanks to advanced technology, such as business intelligence solutions.
BI tools enable a fine-grained funnel analysis that allows retail owners to review and improve customer engagement during every interaction. The access to customers’ preferences and purchase histories arms retailers with a comprehensive view for them to offer consistently tailored experience that today’s buyers have come to expect.
Tip 3: optimize marketing campaigns
US retailers, even smaller ones, conduct hundreds of transactions monthly. This creates a sea of data, which, if embraced, can help retailers craft an effective retail marketing strategy.
Business intelligence solutions in the retail industry help brands ask the right questions, such as the ones below, and define the most relevant KPIs:
- What products are selling well?
- What are the shoppers’ demographics?
- Which stores are selling the most of a given product?
- What are the trends in the sales of specific products?
Businesses capitalizing on business intelligence gain more confidence in their marketing strategies, as they get a better glimpse of their audiences and can tailor marketing messages at a granular level.
While actual sales happen in a physical space, traditional retailers can reinforce their brick-and-mortar revenue with online marketing activities. By collecting and analyzing information from social media, web browsers, user forums, email campaigns, and other online sources, retail analytics software helps business owners predict purchasing trends and blend them with an individual customer’s profile to optimize in-store marketing activities.
Tip 4: understand inventory dynamics
Marketing activities are only as effective as the inventory planning that supports them. Smart BI tools provide a central repository to all inventory and customer data pooled from multiple systems, such as PoS, warehouse management systems, ERPs, and more, analyze it to rectify weaknesses and identify opportunities.
Retail business intelligence helps business owners refine inventory by:
- Optimizing supply to reduce the risk of stock-outs
- Improving inventory allocation across stores
- Determining the most cost-effective way to get rid of low-selling SKUs
- Creating accurate inventory forecasts based on stock and sales data
This way, BI solutions aid retailers in creating and executing inventory strategies that are well-aligned with sales and revenue goals.
Extra tip: retail business intelligence guidelines for success
When analyzing the BI market, one can see that there’s no shortage of business intelligence vendors and platforms to choose from. To find the solution that best fits a specific business, retailers considering a BI tool should first conduct an in-depth assessment of their requirements.
The following criteria can be applied by retail businesses looking for a business intelligence solution that delivers all the four capabilities mentioned above:
- Establish clear objectives for your business intelligence use case.
- Try to choose a solution developed specifically for a traditional retail environment.
- Implement and execute a rigorous change management plan, including measures to attain buy-in from all the stakeholders.
- Ensure you have the right competencies in place to implement the solution. Otherwise, seek aid from external IT specialists who have prior experience in delivering such projects.
- Look for the vendor who can provide strategic and technical support throughout your solution lifecycle.
- Develop post-deployment policies of BI governance and data-quality maintenance.
Business intelligence powers smart retail
The pressure on traditional retail from online stores and marketplaces is still there. To create a sustainable market expansion (and survival) strategy and overcome the key challenges of today’s retail, brick-and-mortar operators will need to upgrade to experiential retailing.
Technology enables them to do that, but only when used right. Business intelligence solutions can feed real-time insights about retail operations and support decisions that promote customer loyalty and spur business profitability.
Non-adopters will continue to struggle, while the ones who are ready to embrace the BI-powered approach will be well-positioned to thrive.