What are Retail Analytics?
Retail analytics, a crucial component for modern retailers, involves the systematic collection, analysis, and interpretation of data from various sources within a retail organization. By leveraging the power of retail analytics, businesses can gain deep insights into customer behavior, sales performance, operational efficiency, and other key metrics. These insights drive data-informed decision-making and provide a competitive edge in the dynamic retail landscape.
However, many retailers encounter challenges in effectively implementing and maximizing the benefits of retail analytics. Let’s explore these challenges and discover strategies to overcome them:
Why do so many retailers struggle with retail analytics?
The top three struggles in retail analytics :
- Streamline Business Processes for Enhanced Retail Analytics: Retailers must adapt their traditional business processes to the demands of today’s competitive, omnichannel environment. By aligning business processes with retail analytics, retailers can unlock the full potential of their data and drive actionable insights.
- Enhance Data Integrity: Accurate and complete data is the foundation of successful retail analytics. Retailers should implement robust data collection processes, ensuring data accuracy and reliability. Leveraging advanced tools and technologies can automate data collection, minimizing errors and discrepancies.
- Foster Data Integration for Holistic Insights: Integrating data from diverse sources is essential for comprehensive retail analytics. Retailers with multiple store locations or an omnichannel presence should prioritize data integration to ensure consistency and obtain a holistic view of their business performance.
To overcome these challenges and maximize the value of retail analytics, retailers should consider the following strategies:
How do we overcome these retail analytics issues?
In the realm of retail analytics, laying a strong foundation is key to success. Just as architects start with a blueprint, retailers must begin with a well-defined business process. By outlining your business process, you can easily identify the retail analytics necessary to support each step of your operations.
A standardized business process serves as a catalyst for data-driven decision-making. It ensures that performance metrics align with your business objectives, providing a structured approach to data collection, processing, and presentation. With standardized reporting integrated into your planning tools, decision-makers gain access to accurate and up-to-date information, empowering them to make informed decisions.
Standardized retail analytics encompass the use of defined methodologies, templates, and definitions. These elements guarantee consistent data collection and reporting throughout the organization. Employing technology such as data warehousing, business intelligence software, and reporting templates streamlines data analysis and presentation in a standardized format.
Standardized reporting supports an established business process by:
- Defining reporting requirements and goals by asking, “what are we trying to accomplish with this report?” What decisions are made using this information? “What insights will help the organization achieve its goal?”
- Establishing data collection processes – Data consistency and reliability are critical. Data accuracy enables trust and, in turn, improves productivity. And more importantly, decisions are based on accurate information.
I have seen variations in executing Standardized reporting, but this is my take on it.
A well-designed business process with standardized analytics can help organizations improve data accuracy and reliability, reduce the risk of errors, and support informed decision-making.
Standardization improves productivity in the workplace by eliminating wasted time and providing a common framework of data delivery for users to understand and act upon quickly.
This is a recurring theme when we conduct business process reviews for our Planning tools with clients. There is always a minimum of a week of lag between the decisions made during these business review meetings and the time it takes to analyze the action impact. I asked about the team’s prep time needed for an assortment planning review. Invariably, the planning team answers: “they need to rerun their Revised Plan for a more accurate open-to-buy.” And from the Buying team: “they need to spend a week compiling data and formatting it; they will create posters and bring clothing in to show the assortment.”
Cohn’s Law suggests that the more time you spend reporting on what you do, the less time you have to do anything. Isn’t the time better spent on actioning to the decisions of these meetings rather than pulling data?
Give time back to your Planning & Buying team.
Automating and standardizing your analytics and reporting is important for retailers because it provides a common understanding of performance metrics across the organization; it enables effective decision-making and supports continuous improvement by providing the timely data and insights needed to identify areas for improvement.