Retail is in the Details: Using Your Data to Drive Better Decisions

Mar 07, 2016 — Aaron Shauf
Making sense of business intelligence - http://yritysforum.com/

Data is either loved or data is hated. To some, it is a world of meaningless numbers that are scanned to produce a gut feeling, and to others, it is meticulously combed through and scrubbed and cut up to produce a reasoning in the decision making process. But when comparing the investment of proper data analysis, versus the substantially less investment of an industry veteran’s gut feeling, one may wonder about the ROI.

Consider the perfect retail environment. The shelves are stocked with the perfect amounts and perfect mix of product. The desired customers file in, and browse, and pick the product based on their needs and desires. There is a completely adequate amount of staff to service all the customers and fully service their shopping experience with whatever they may need to aid their decision making process.

Prices are reflected at the point where no customer is swayed to non-purchase by it, yet profits are maximized. All customers are delighted with their in-store experience. At the end of the day, the last customer picks the last product, and pays the perfectly appropriate price for it, leaves with a smile and thoughts of coming back for their next purchase, as they are confident it can be as pleasant and enjoyable as the visit just ending. The store is then shuttered for the day to have the shelves perfectly restocked for the next. 

Accomplishment of this feat would equate to filling out the perfect March Madness bracket while getting struck by lightning with the winning Powerball ticket in your pocket. 

Not one more customer could be serviced and not one more product could be sold. Satisfaction levels are the highest and profit is maximized.

It sounds a bit robotic and utopian to me, but it is essentially the goal, is it not? Accomplishment of this feat would equate to filling out the perfect March Madness bracket while getting struck by lightning with the winning Powerball ticket in your pocket. 

That is not to say it is not to be strived for though. Every inch taken toward this feat, whether in terms of product mix efficiencies, staffing efficiencies, customer experience, or product pricing strategy boils down to one thing: store profits.

To inch one’s way towards this beautiful scenario, one has to examine the elements, the causes and effects, the minutia of customer behavior and the product movement. This can all be seen in the data.

Data analysis offers the insight and the understanding of the operations that can move a store in the direction of increased profits and there is no limit to how close one could come to the golden chalice of perfect retail.    

Workforce management and staffing data, combined with traffic flow data is making misappropriated staffing levels a thing of the past. 

Managed inventory analytics can bring the right product mix and inventory strategies to minimize the lost revenue risk of over and under stocking.

CRM data and analytics are evolving to contact desired customers with a purchase history in a timely manner with new offers based on past expenditures, loyalty, and trends.

Workforce management and staffing data, combined with traffic flow data is making misappropriated staffing levels a thing of the past. 

Pricing versus purchase data has been on every distributors radar for decades, and is constantly evolving to maximize turnovers.

Traffic and browse patterns are constantly being tracked in new and innovative ways to turn the store visit into a smooth flowing and enjoyable experience to capture each sale.

And there is so much more to be discovered and utilized yet. It's old news data analytics are essential to the success of the retail store, but the true potential is still just being tapped into. Every provider and every user of data and data analytics can discover new insights and make better decisions by simply innovating with data above and beyond every day uses. 

I never guess. It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.
- Sir Arthur Conan Doyle, Author of Sherlock Holmes stories

Topics: Business Intelligence, CRM, HR Management, Vendor Managed Inventory

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