As retailers we are constantly managing transactions, from purchasing to promotions through to sales and service. The question is, are we capturing data efficiently and translating it effectively?
Having a strategic approach to managing the capture, collation and output of data is critical. This is more than simply ensuring that we have a suite of standard reports. Correct and effective strategy requires us to achieve a ‘forest view’ of the information we need to publish to all levels of the business based on past, present and future insight. This might be where we need to expand our data scope and output, and potentially look at unstructured data.
From sales per hour, to basket size and gross profit, there’s a mountain of transactional data that our IT systems might already be capturing for analytical purposes. But what about the non-transactional aspects of our retail environment? Is there a channel of information that we are yet to capture?
With the rise of Big Data – or large amounts of data/unstructured data – there has been an increase in market insight not seen previously. Big Data has been linked to predictive analysis. Take, for example, discussions regarding your specific business or the market captured via Twitter or Facebook. Customers might be speaking to their desires, future transactions or even frustrations. These conversations could provide not only a directional path, but form the future framework for our business processes.
Then there’s that more localised data that speaks to business directly. For example, weather is a variable that might provide valuable insights into buying patterns and this supports benchmarking between locations. A snapshot of the number of car spaces available throughout the day, events such as sporting matches or local theatre, all create anomalies in spending patterns that our historical data simply doesn’t have the means to interpret.
Business Intelligence (BI)
BI is increasingly becoming a driver of conversions and retention, increasing efficiency and profit alike. Yet for many organisations, leveraging huge quantities of data to yield accurate insight can be a challenge.
These challenges are broadly defined by structure and data. For businesses with IT systems in place, the goal will be to translate existing data structures into a common format. For many retailers using ‘silo’ systems, capturing data and standardising the information will absorb the greatest amount of initial resource investment.
Here are some helpful hints for developing accurate customer insights from your data:
- Begin with the right solution – Business management softwares such as enterprise resource planning (ERP) that are aligned with BI solutions can give mid-sized retailers the tools they need to improve customer and supplier interactions, staff efficiency and bottom line. Simpler solutions exist for smaller businesses so it always pays to do plenty of research.
- Spend time and resources in cleaning your data – Existing data may be disparate and inadequately formatted for deriving a unified customer view. However, matching good data with the right system is the key to creating a worthy outcome from this information. Spending time and money on bringing these two things together is definitely worthwhile.
- Never take your eyes off the prize – With increasing data velocity, one clear differentiator for businesses is the ability to leverage that data in real-time, thereby formulating proactive plans via predicative analysis. Therefore, developing and streamlining a functioning BI strategy that encompasses all relevant customer and sales data should really be considered the first step.
For retailers, having a profile of the customer base across all channels, be it in-store, online or even socially, can enable benefits through streamlining operations to reduce costs and complexity. The decision for some retailers will be whether to invest in third party systems that can aggregate their disparate channels or consider investing in integrated solutions that can streamline the data, decreasing the complexity and potentially overall investment.
In fact, it’s even more critical for smaller, often expanding operations to understand their customer base, streamline operations and decrease complexity to stay competitive. Gartner reported that businesses that enable their sales representatives to leverage data on a day-to-day basis stood to increase revenue productivity by 17 percent. That could be a considerable increase for many retailers, especially small, cost-conscious retailers.