Retail Business Intelligence: 3 Benefits You Can't Afford to Ignore
Date: Friday, September 23, 2022
As a retail business owner, you know that data is essential to your success. You need to know what products are selling, how much inventory you have on hand, and who your best customers are. This information allows you to make informed decisions about what products to stock, when to restock them, and where to allocate your marketing budget.
Retail business intelligence (BI) provides all this data and more, allowing you to make sound decisions for the health of your business. In this blog post, we're exploring the benefits of retail BI and how it can help improve your bottom line.
What is business intelligence?
Business intelligence is a process that collects data from internal and external sources like CRM, ERP POS and finance systems, then transforms it into actionable insights that businesses can use for their decision-making. The main goal is to eliminate data silos so you can measure sales, revenue, inventory, expenditures and other metrics in one place, and get holistic analytics to make advanced forecasts and decisions. This process allows businesses to better understand trends, identify opportunities, and pinpoint areas for improvement.
If that sounds simple, well, it isn't. To get value from a large amount of raw data, it's not enough to simply capture and collate it. Today's BI tools use a variety of techniques, from data visualisation (charts, graphs, timelines etc) to predictive analytics and machine learning, to help businesses make sense of their data. A lot is going on under the bonnet, although the tools themselves are user-friendly and easy to navigate for non-technical employees.
How retail businesses can benefit from BI
Now you know what business intelligence is, it's time to explore how it can benefit your retail business specifically. Here are three benefits of retail BI that you can't afford to ignore.
1. Customer attraction and retention
With retail BI, you can go beyond basic demographic information to get a more complete picture of your target customer. For example, you can track purchase history, web browsing behaviour, and even social media activity to better understand the customer’s needs and wants. With this information, you can segment your customers into more targeted groups, offer products and price points that meet their expectations, and create marketing campaigns that are more likely to resonate with them.
Today's BI tools are advanced enough to track customer behaviour in real time. Using Internet of Things technologies, retail businesses can instantly sync in-store and online sales data to get such insights as what products are the most popular and how different retail touch points are performing. For e-commerce businesses in particular, getting up-to-the-minute data on your customers' shopping habits allows you to deliver special offers and optimised pricing that draws customers in. Customers can be hooked in the moment and get customised offers and loyalty programs to keep them coming back to your store.
In short, retail BI helps you to create a more seamless and personalised customer experience, which is essential for building customer loyalty.
2. Increased inventory turnover
With retail business intelligence systems, there is no need to manually monitor inventory turnover. By tracking data such as customer purchase patterns, product popularity and historic supplier performance, you can make sure that you always have the right products in stock. This way, you can avoid the cost of holding onto excess inventory that doesn't sell, while also ensuring that your customers can always find the products they're looking for.
More advanced BI tools feature predictive analytics, which combines historical data, statistical analysis and machine learning to give retailers a peek into the future. Predictive analytics tools can help you forecast future demand for certain products, so you can plan your inventory accordingly and avoid out-of-stocks.
By using retail BI to increase your inventory turnover, you'll not only save money but also improve your customer service.
3. Reduced marketing costs
Targeting the right audience with the right messages at the right time is the number one challenge for retail marketing teams. Things move fast in retail, and traditional business reports with their static data can no longer keep up with the pace of change.
With retail BI, you can track customer behaviour in real-time and use this information to adjust your marketing campaigns on the fly. For example, you can target customers who have abandoned their shopping carts with special offers or send follow-up emails to customers who have made a purchase.
By understanding which marketing channels are most effective for reaching your target customers, you can also allocate your budget more efficiently and ensure that every penny you spend is working hard for your business.
The bottom line
The benefits of retail BI are valuable in isolation but together, they make a significant difference to the bottom line. With relevant, holistic and real-time data at your fingertips, retail BI can help you keep up with customer trends, address supply chain complexities, optimise marketing performance and, ultimately, save money and grow your business.
If you're not already using BI in your retail business, now is the time to start reaping the rewards. To start your data transformation, get in touch with our expert team today.