Turn back your clock some four decades back, and you’ll realize the pain retailers faced while maintaining their sales count and inventory. This state of retailers was not because of insufficient data but because of overstocked data.
In the year 1975, Walmart decided to adopt new technologies for maintaining their inventory control of all merchandise in warehouse and distribution centers by preparing income statements of each store. They receive more than a million footfalls a week in an average store in USA and Amazon rules the game by more than a billion visitors in their online store. They started building the foundation for an integrated IT architecture backed up with information of warehouses, home offices, vendors and series of large retailers.
Online transactions are culminated, recorded, and then forwarded to the forecast system to trace the unusual sales pattern; and this way the tracking of customers is done. Since then, other retailers have been taking baby steps in adopting improved data analytics to stay ahead in competitive markets.
In this data-driven environment, retailers are completely dependent on extracting information from data. The only challenge company’s face is to dig out information from a heap of unstructured data and perform analytics in a robust data backed environment. Discovering patterns and working on them gives immense opportunities to retailers to transform their business.
Retail analytics; what analytics is capable of offering to retailers?
- Capability to get ROI from a right set of resources & balanced inventory
- Strategies for high profitability, pricing, and promotion
- Strategizing marketing trends and spends
- Improved demand management
- Identifying and retaining best customers
- Managing customer demands efficiently
Retailers want to take full advantage of analytics but aren’t sure that its deployment and usage. With insubstantial knowledge of methods to handle data and shortage of skilled resources make retailers perplexed and obscure of what to do with ever-increasing data.
Conventionally order processing was all about; a salesperson goes to the outlet, counts the inventory, explains the promotions (if any) and then suggests an order to the store owner. The store owner then agrees or modifies the order. But today, the order would be suggested by the analytics tools in the modern retail chain. Then the order either would flow to the manufacturer or logistics service provider; only if analytics is leveraged appropriately. Today’s retail business is getting complex and bigger, but their access to analytics and data management is not improved considerably.
Why do companies lag behind in technology?
Retail companies are skeptical at trusting new technologies and resort to several reasons for not adopting data analytics. They come up with excuses of not understanding data management for analytics. But the main reason is the fear of upsetting their traditional method of work. They claim that these technologies are a little overrated and their outputs are even exaggerated.
Some of the leading and best data and analytics vendors who have tried their best to bridge this gap of what are the actual challenges, what solutions they can provide, and how would it help those retailers. This has mostly occurred due to an incomplete understanding of analytics and real-time retail business rules and most of the times it is both.
Traditionally if you see the competition was between the shops of the same street or locality, but now there is no fixed street or locality. This competition is expanded in a varied spectrum of channels and sites. The most obvious cases are customers buying products from different sites and staying under the same roof, but this is a matter of choice of customers and services they adore.
Moreover, there are products launched every month and every day, so there are humongous data that can and should be analyzed. Consider data analytics as a business strategy because there are successful retailers who were early adopters of analytics and there are companies mimicking the early adopters.
Now is the right time to adopt data analytics
There is no right time to using analytics it’s only the need. The opportunity is right there, and there are data analytics solutions waiting for you to leverage them to understand your data sets. The retail industry is an ever-expanding industry with changes happening at every minute and not using data efficiently can shake up retailers. Instead of worrying about sustaining in this competitive market start caring for your dusting data.
Time is ripe for traditional retailers to change their mindset of moving from their traditional processes and to get along with the trend of analytics. Analytics will only let you understand your business more precisely and help you develop a robust system fit to overcome every challenge coming your way.
