Too often in retail, analytics is limited to customer or marketing analytics and is seen as a tool to be used solely by the marketing team. This is like driving a Ferrari at 20km/hr.
Analytics is significantly more powerful than that and can be used across all areas of a business to provide data driven insights into areas such as competition and market, category and channel, and operations and supply chain.
The most successful retailers utilise analytics to:
- monitor competitive position including category spend, share of wallet and difference in customer behaviours in comparison with their competitors;
- drive tactical and strategic responses by identifying drivers influencing market share movements;
- attract and access new customers while minimising investment and costs through sophisticated store planning and network analysis;
- unlock cash by minimising inventory through data driven inventory management; and
- improve profitability at a category and product level by better curating product mix.
It can be overwhelming, however the key is to make a start with the data and tools you currently have available. It does not have to be costly. Analytics is simply a process of identifying relevant data ‘assets’ and using those to obtain insights that are not only interesting, but useful.
Your data assets are more than your customer lists and no dataset is too big or too small, be it loyalty program databases, purchasing and sales history, or transactional records. Internally generated data sets may also be supplemented by external sources of data that can be leveraged to provide insights that are more powerful.
A holistic and integrated approach to data analytics involving all aspects of a business is creating value for top retailers. It might start small, however sharing insights across the business can really rev the Ferrari up.