Digital Analytics in the Retail Industry
Every industry has assimilated data in real-time, modified it in the modern digital era. This shift in the business process has made it necessary for the retail industry to be a part of the race and optimize and enhance business processes. Today, the competition is so intense that to survive, retailers must now focus on selling experience along with products. Customization and personalization according to customer needs gives retailers an edge over others in the industry. Customers do not care anymore about the channels as far as it is suitable and fulfils their expectations.
Retail is a data-intensive industry. It serves millions of customers and moves thousands of items on daily basis just to build a profitable relationship with customers. With such a huge pool of customers and inventory it becomes difficult to manage business processes along with channelizing and managing data and generating profits. The amount, variety and speed of data flows that retailers need to process has increased exponentially in the last few years. From being focused on transparency, productivity and swiftness, retailers now need to focus on data analytics, customer insight and engagement.
Digital analytics has played a key role in helping retailers manage valuable data. The e-commerce platform is the best example of how an analytics user can acquire most benefits. The retail industry has come a long way by grabbing deeper insights using analytics. It is applied on all stages of the retail process – from tracking popular products, forecasting sales, improve product placements, identify customers and target them, know customers and suggest their next purchase and many more. Digital analytics has direct benefit in some strategic areas of retail.
Through digital analytics, one can track demand, inventory levels and competitor activities. It also assists in price optimization and shows that from what level would a gradual decrease in the prices would lead to revenue increase. It helps retails understand the customer buying trends with respect to seasonal and demographical trends. This in-turn helps in inventory management. Nowadays, retailers need to focus on the current trends. Various algorithms forecast trends and provide details on which products need to be promoted or stocked up.
Analytics also provides specifications on which customer are likely to buy a certain product. This helps in creating customized loyalty programs for individual customers. Majority of customers in retail use coupon codes to avail deals. While creating deals, retails need to know how beneficial each deal would be for the business. Retailers analyze historical data and apply it in predictive modelling to determine the impact of each offer and re-adjust the discount strategy according to the results.
Digital analytics also has a massive impact on the marketing aspect of retail. It helps in conducting online behavioral analysis and create and deliver personalized location-based offers. It also helps in designing targeted campaigns by segmenting customers and identifying the best channels to reach them. Customer experience is of utmost importance in retail. Analytics is the key to enhance customer experience across all devices and channels, online or offline. Reward programs, personalized recommendations can be offered, and market insights and customer feedback can be obtained and analyzed through digital analytics. Through all this, retailers can succeed in providing a streamlined and seamless experience to customers.
With all the benefits of digital analytics in the retail industry, the retailers face a few challenges while optimizing analytics in full capacity. Security, privacy, IPR and other policies stringent when it comes to analytics. Many companies make a mistake of falling in short-sightedness and not having a clear long-term vision. These mistakes can be fixed by continuously modifying the offers and taking actions on the feedbacks.
Retail faces a lot of data-disruption because data is received from several sources. Organizations would reap the benefits of better risk management, improved performance and availability of more insights through analytics. Digital Analytics is at the intersection of customer preferences, business strategy and processes. Market insights and customer feedbacks will be deeply rooted across the retailer’s value chain and enable them to be predictive, efficient and operational.
Mohan Sharma works as an inbound marketer for Streebo, a leading provider of chatbot platform. When he isn’t working, he is traveling a lot around the world or dreaming.