Businesses in the retail sector need to ensure they have access to high-quality analytics solutionsRead More
Advanced analytics ‘vital’ for retailers
Businesses in the retail sector need to ensure they have access to high-quality analytics solutions or risk being unable to compete with more tech-capable competitors.
This is according to Gartner, which stated that the impact of technologies such as the Internet of Things (IoT) will prove to be highly disruptive to the sector over the next five years, more so than any other innovation seen to date. Therefore, advanced analytics capabilities will be required to deal with this landscape.
The organisation defined these tools as "the analysis of all kinds of data using sophisticated quantitative methods to produce insights that traditional approaches to business intelligence – such as query and reporting – are unlikely to discover."
Retailers who lack such capabilities will struggle to capitalise on the opportunities offered by IoT. Gartner observed that in the coming years, this technology will mean their customers are no longer limited to humans, but will also include 'things' that band together to automatically negotiate prices and complete sales.
For example, Gartner highlighted a customer's refrigerator that can sense the need to replace its water filter as an example of a retailer's need to embrace IoT to compete, and the associated requirement for advanced analytics.
Robert Hetu, research director at the company, said: "While today the retailer may feel confident in that customer's repeat purchase – perhaps because the customer acquired the appliance from the store or is comfortable locating the filter in the physical store – the refrigerator, seeking the replacement on its own, has neither loyalty to the retailer nor concern about finding the item."
As a result of this, IoT-equipped devices will seek out the best combination of price and availability from all potential suppliers. This change in approach will require retailers to evaluate potential transactions in an instant and make decisions such as whether to adjust pricing.
Gartner stated that this need to improve real-time business decision-making will result in retailers looking to deploy self-service and big data discovery capabilities. With big data discovery, the entry bar to explore big data sources will be lower, while analytics can be delivered quickly at a lower cost by a broader and less-skilled set of users, ready for consumption by a wide audience.
"Big data discovery tools put information in the hands of business analysts and business users to enable better decision making," Mr Hetu said. "Since these analysts and users are less skilled than their counterparts in traditional BI roles, they will only handle less complicated problems, which will take them less time to fail or succeed."
However, he added that these end-users are also closer to the complexities of the business. this level of understanding will make it easier for them to help establish interactive analytic processes that will speed up results. This will result in big data sources being explored more often, feeding valuable information into the business and yielding faster results.