Competition in the retail industry is rising day by day. In a marketplace that’s becoming increasingly digital, retailers are compelled to use advanced analytics to ensure their business survives the competition. Before using analytics to evaluate store performance, it is necessary to identify the objectives behind adopting it. This ensures that the derived intelligence is effectively acted upon. Here are the three major reasons why businesses should consider using in-store analytics:
Significance of Retail Store Analytics for Small & Medium Enterprises
Majority of retailers invest in resources that churn out tons of detailed data on sales and pricing. But, out of this majority, there are a very few businesses who have progressed beyond intuition, past experience and overly simple Excel spreadsheet analysis of the gathered data.
So, what’s the outcome? Retailers adopt a knee-jerk reaction every time there is an increase in production cost. They raise the prices in direct proportion to the manufacturing overheads without understanding its impact on sales volumes. One of the features of modern in-store technology solutions is price sensitivity analysis. With this feature, retailers can get a better visibility about when and by how much should prices go up or down. An approach like this can generate additional revenue for the organization and safeguard from price hikes by competition.
The right kind of insights enable businesses or retailers to make informed commercial decisions. Keeping a count of people and tracking conversions is at the heart of retail analytics. Also, these insights help build on understanding consumer behavior, monitor store performance and improve the shopping environment. Further, data gleaned from all these sources coupled with advanced analysis of customer data has the ability to drive sales and also improve retail staff productivity.
A major advantage of retail store analytics is the increased understanding of customer behavior. A better comprehension of the buying journey can reveal critical insights about brand engagement levels, how shoppers navigate a retail store and exposure to products throughout the store. According to a Forbes article, technology (for example, Digital Beacons or Facial Recognition) is also being used to predict customer moods.
A new concept, mood analytics, can help businesses send targeted content and offers in store depending on how a customer is feeling. For instance, imagine a customer is walking around in a store, facial recognition reveals that she is confused. Beacons show that the customer has been inside the store for over 45 minutes, is hungry and has been browsing the shoes section for over 30 minutes. How can the store use this information? Simple. A targeted message through the store’s retail mobile app is sent to the customer for a 15% off shoes if she makes the purchase within the hour and maybe even a meal voucher for the food court. This is where innovative technology solutions in retail can come to the rescue and perhaps even induce a purchase.
Thus, an efficient use of the information generated, in the form of in-store retail analytics, will empower retailers to adapt well to the changing industry landscape. Additionally, with the help of information technology, a physical store can implement decisions that positively impact cash flow and increase profit simultaneously.