Increasingly, there is a gap between retailers that are leveraging technology and those that are not. The former are the ones focusing their efforts on becoming a truly omnichannel retailer and using the available tools at their disposal, tools like data analytics, to avoid being left behind.
Now more than ever, data must drive retail decisions. Retail veterans may argue that data has always played an important role in business management. Even before technology automated data collection, retailers carefully tracked metrics such as inventory turnover, average sales, and redemption rate to gauge the effectiveness of their business strategies.
However, there is a difference between data that tells you the effectiveness of a promotion and data that indicates that you should launch one. In increasingly crowded markets and a climate of fierce competition for customer loyalty, retailers need to plan their next steps based on the cold, hard facts.
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The reporting and analytics module of your retail management suite is designed to provide you with the insights you need to navigate toward your business goals and narrow the gap between where you are now and where you should be when it comes to customer service, operational efficiency, and competitiveness.
How Unlock the Value of Data
There are right ways—and wrong ways—to collect and use data so it provides the greatest value to your business:
- Use Case: As software developers, we tend to rely on use case methodology to organize a system aimed at reaching a goal. We look at all possible factors that can influence progress toward the use case. Understanding the factors that result in, for example, increased in-store conversions, such as store traffic, merchandising, upselling attempts, and pricing, can help you focus on the data you need to collect to measure progress toward that goal.
- KPIs: Once you understand the parts of a system that can help you reach your goals, you need to establish measurable values, often referred to as key performance indicators (KPIs). You could merely track in-store conversions for a high-level understanding of performance, but you may prefer to track KPIs related to the elements of a system to see if there are particular areas that need improvement. It’s a smart strategy to focus on a few relevant KPIs, rather than taking time to monitor all possible factors involved in a use case.
- Data Collection: With data collection and analysis, remember: garbage in, garbage out. If data is erroneous, inaccurate, and flawed, analyzing that data will provide you with conclusions that are also erroneous, inaccurate, and flawed. With bad data, KPIs are useless—there is no way to know if they truly represent what is actually occurring in your operation. Determine and use the most accurate method of collecting the data you need, whether it’s data from your point of sale (POS) system, traffic counting or heat mapping solution, or inventory monitoring. Leveraging technology and automating data collection will enable the most accurate, real-time data and provide you with the most reliable insights into operations.
- Eliminate Silos: Limiting analysis to data collected from one source will provide you with limited insights. This is probably the most common challenge I hear when speaking to retailers. Analyzing data from an integrated retail management suite can provide you with a new dimension of insight that associates events that occur concurrently or in a cause-and-effect manner. You may, for example, now understand not only that traffic passed by a display based on a heat map, but with an integrated system, you can see whether the display resulted in increased conversions.
It’s particularly important to analyze customer data from all sources – eCommerce, in-store, loyalty program, mobile device data—to build a 360° view of the customer. The analysis will provide great value as you personalize service and marketing for greater effectiveness—and better customer experiences.
Data You Need Today
For many retailers, knowing where to start with data analytics is the toughest hurdle to cross. An analysis of your business overall can help you focus on which areas to target for improvement and, subsequently, the data you need to collect to show progress toward those goals. But make no mistake, it is important to find a way to overcome challenges and join the pack of successful retailers using data insights to drive their businesses.
iVend Retail offers a Retail Business Health Check designed to identify key issues within your business systems so you can prioritize your goals. It is an excellent starting point for your data analytics strategy.
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