However, BI is highly important: it can help your business – particularly if you’re in the retail industry – to develop in all areas and be ready for new possibilities as they come.
You've also probably heard the phrase "the customer is always right." However, how can you anticipate what your customers want and keep them happy? Customer demand, after all, is continuously changing, with new trends appearing every day. This is where BI comes into the picture.
So what is the role of business intelligence in the retail industry?
What is BI (and why does it matter)?
BI is a valuable tool that companies utilize to better understand their customers and markets. These strategies and technologies collect data and convert it into information. After that, it's changed into knowledge, and it's based on these insights that business decisions are made.
By displaying present and past data within the business context, BI can assist companies by improving their decision-making. It ensures that analysts can quickly identify market trends in order to boost sales or revenue. The right data, when used appropriately, can help with everything from compliance to employee hiring.
Here are a few examples of how business intelligence can assist you in making more informed decisions:
- Determine ways to boost profits
- Analyze the behavior of your customers
- Compare your performance with that of competitors
- Monitor and improve your KPIs
- Determine your chances of success
- Recognize market trends
- Identify difficulties or problems
Key benefits of BI for retailers
Let's dive into some of the key benefits of using solutions offered by BI companies today in your retail operations:
Open and manage multiple stores
No doubt there's a reason to celebrate when you're opening additional stores – your business is thriving. While more stores offer wonderful opportunities to reach a bigger consumer base, they also pose a significant challenge: each of these locations must uphold your brand promise at every customer touchpoint. In addition, given how fast-paced the sector is, if anything isn't working properly, you'll need to figure out what's wrong and how to solve it immediately.
This is where a retail BI solution comes in. With it, you can say welcome to a new age of interactive data analytics and say goodbye to never-ending spreadsheets and static reports. Consequently, you'll be able to figure out why some of your stores aren't doing well, or why customers aren't buying things at a specific store despite promotions, and take an appropriate action.
Keep up with changing consumer trends
To be effective at marketing, design, product development and any other activity that affects your customers, you should keep track of the changing retail consumer trends. Key retail trends are being driven by emerging consumer behaviors and transformational cultural developments, such as the following:
- Consumers anticipate a wide range of low-cost, high-quality and socially conscious items.
- Consumers expect retailers to engage with them in a consistent and quick manner across multiple channels.
- Consumers nowadays are also well-informed, thanks to modern technology which provides unparalleled access to product information, pricing and reviews.
You'll need a retail BI solution to accomplish this. Retail BI systems let you compile and analyze large amounts of data to uncover trends in your consumers' purchasing habits. It also allows you to plan, track and assess the success of your promotional efforts in order to learn more about seasonal promotions, marketing incentives and how your customers respond to competition.
Address supply chain complexities
Changes in sourcing procedures, as well as diversification in sales and distribution formats, have all contributed to supply chains becoming substantially more complicated in recent years. Because products must be available on shelves at all times, there’s an ongoing need to ensure quick restocking, typically many times a day, while keeping inventory levels low inside stores. A retail business intelligence solution can help you optimize your processes across the board, resulting in lower markdowns, more profitable assortments and better inventory management.
BI technologies for retailers
Highlighted below are the most effective business intelligence technologies retailers can use:
1. OLAP cubes
This BI technology gives retailers multidimensional data acquired from distinct, unrelated or even siloed sources (with the exception of transactional data). It cleanses, stores and transforms complicated data in a logical order to prepare it for on-demand analysis whenever and wherever it’s required.
2. Data mining
Data mining is an automated pattern-identification approach to examining pre-existing databases and storage and applying statistics, artificial intelligence and machine learning principles to extract new or previously unknown information and trends from the data sets available.
Data dashboards are ideal for bringing all of your organization's BI data together in one location and making sense of it. These tools track the progress of metrics, customized KPIs, and objectives and visualize the data in a clear, easy-to-understand manner.
Furthermore, built-in dashboards provide thorough but not overwhelming information about the company's key areas. Thus, retailers may examine crucial performance metrics such as customer retention rates, inventory turnover, and conversion at a glance.
4. Predictive analytics
This business intelligence technology works in a similar way to data mining in that it studies historical data to produce timely evidence-based insights. There is, however, one significant distinction: predictive analytics employs the acquired insights to forecast and project future scenarios, conditions, and hazards, rather than reporting existing trends and patterns.
It's risky to work in retail these days without access to capital that's equivalent to a small country's GDP. Without the correct strategy and technologies in place, fortunes may be earned and lost just as rapidly. Needless to say, even the most rudimentary application of business intelligence technologies, combined with the timeliness of key reports and indicators, will keep you afloat, allowing for quick decision making, ensuring easy execution of day-to-day operations and also providing insight into the products the market and customer segments prefer more.