Ivy Feb 11, 2014 No Comments
Which customers are our biggest influencers? What parameters do we use to decide ‘level of customer influence’?
Is there a high-performing store that needs customised product flow optimisation?
How do we decide on the product-mix for each store?
Does the online shopping pattern of our customers reveal trends that can be converted into personalized offers?
The retail sector in India is one of the fastest growing, with the online retail market projected to grow at a CAGR of 43.5% during 2013-2017, according to a report from RNCOS.
The Indian Retail landscape
What began as a tentative microcosm with eyewear (Lawrence & Mayo), footwear (Bata) and Photography (Kodak) stores across metros in the 1950s has today evolved into a massive retail culture across the country. From small patisseries to signature boutiques, the concept of retail store network has invaded every area of business. Retail outlets have not only conquered the metro landscape but also pervaded the smaller towns where the ‘kinara shop’ has always dominated.
A data-driven environment
In this fiercely competitive scenario where you find one pizza eatery setting shop next to another in the same street, analytics have become the most powerful tools available to retailers. Firms have realized the value that analytics brings to decisions based on insights. For instance the advertising and marketing campaign of the two Pizza delivery outlets is meaningless without an insight into demographic profile, customer habits of the neighbourhood and order preferences.
The amount of data collected in the retail sector is voluminous and ongoing. Retailers are faced with massive data from POS (Point of Sale), online/ LDAP systems and internal transaction processes. With various analytical technologies available, the retailer is able to apply the best-fit method and model to suit the retail strategy and scalability requirements.
So what is retail analytics?
The explosive market growth in the retail sector is fraught with a cutting edge environment where footfalls /sales per square foot hold swayas much as retaining customer loyalty. It is only the savvy retailer who sifts through terabytes of data for analysis, to cater to consumer requirements, who remains a step ahead. This employment of various mechanisms of analytics to create efficiencies, retailer profits, best services and enhanced consumer experience, is retail analytics.
How does Retail Analytics empower the retailer?
“Retail Analytics delivers scalable, flexible, advanced and cost effective analytics solutions for optimising merchandizing, marketing and customer decisions”. This descriptive from an analytics vendor best describes how retail analytics supports businesses.
Analytics empowers the Retailer with insights that can be leveraged for informed decisions like:
# customer acquisition & retention
# customer profiling (demographic & expenditure characteristics)
# defining store catchments areas
# product pricing
# shelf space optimisation
# location based promotions
# inventory planning
# building customer loyalty programs
# optimising m-commerce
# advertisement planning
Key channels of Retail Analytics
Retail analytics entails a ‘”360-degree view of the customer”, which leverages various segments of the retail experience to provide insights into an ever-changing retail marketplace.
[Gain insight into Marketing Analytics – IVY blog].
With liberalisation of FDI norms in the Indian retail sector and hypermarket retailing becoming the norm, the amount of data being collected and processed has revolutionsied retail analytics. From end-to-end customsied retail analytics solutions, to hybrid cloud solutions for a cool multi-channel retail experience, and adoption of Big Data strategies for data-driven insights or putting the edge on the shelf – retail analytics has evolved as the biggest analytics spectrum, encompassing a whole range of innovative analytics segments in keeping with the dynamic retail market environment.
For a detailed overview on the various segments of retail analytics look out for further posts.
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