Retail business analytics is increasingly recognised as a tool that retailers can’t or shouldn’t be without, providing invaluable insights into the inner workings of the business, to guide efficient decision making. Recently, have written about the use of business intelligence dashboards to gain a greater understanding of operational issues within a retail business, and this is certainly a growing area of usage. But the single thing that comes up most often in my analytics discussions with retailers is how to drive more sales. So I thought I’d share with you how I see retail store analytics being successfully used to capture and present information that can help do just that.
The right amount of stock, in the right place at the right time
You can’t sell what’s not there – so simple to say, and so much harder to avoid. Probably the single most frustratingsituation for a retailer is to have customers in the store wanting to buy a product that just isn’t on the shelves. Knowing that by the time you have ordered it, or transported it from the warehouse, those customers have probably gone and found it elsewhere, and possibly done longer term damage to your sales by posting on social media how disappointed they were that you didn’t have the item. So the first way in which retail store analytics can help increase sales is by helping retailers to predict demand and respond to real-time trading fluctuations to ensure optimum stock levels. The word ‘optimum’ is key here – it’s not only important to avoid stock run-outs, but you certainly don’t want to be overloaded either, with goods that either have to be returned or sold at a minimal margin. The right retail store analytics system enables retailers to keep tabs on inventory turnover rates with alerts to avoid stock outs as well as analyse non-performing products to manage inventory accordingly.
Promotions that hit the target
Well run, effective promotions are a powerful weapon in the retailer’s armoury, driving sales revenue, loyalty and brand advocacy. But it’s all too easy, without the right data behind you, to build offers that simply eat away at margins. Retail data analytics enables retailers to build an in-depth understanding of products and transaction data, to predict accurately which products should be sold together, understand how pricing impacts sales volumes and margins, identify which products produce the largest returns and capture customer-level statistics to develop a better understanding of customers ‘purchasing behaviours. This vital information feeds the development of highly targeted marketing campaigns.
Recognise and reward the best
Great store staff are at the frontline of generating increased sales – the shopper’s experience in the store is one of the single biggest influencers of their purchasing and spend. But how do you make sure you recognise, incent and reward the staff who are doing the best job, to keep them motivated, and to be able to replicate their approach in other stores? Retail data analytics can help here too – by monitoring sales activity to identify your top-performing staff and stores. A flexible analytics system, like iVend enables retailers to monitor sales activity throughout the day and produce graphical reports by store, vendor, employee and even hour of day for key metrics such as total sales, average sales and margin. With this data at your fingertips, it becomes so much easier to work out who is doing what right and to repeat it across your entire business for increased sales.
Staying on top
No matter how well you are doing, if the competition is doing better, you’re not in the number one spot. It’s essential to be able to always stay one step ahead of the competition. Again, detailed analytics data can help – enabling retailers to monitor and quickly respond to market conditions. By capturing Customer-level statistics (including Total Visits, Average Sales Amount, Average Unit Items Sold, and Average Margin $) retailers can gain an in-depth understanding of their customer’s purchasing behaviours and preferences and use that data to provide better customer service and stay at the front of the pack.