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How are retailers using their BI data?
When it comes to taking advantage of the growing amount of information available to businesses, firms in the retail and consumer packaged goods (CPG) market are likely to find there are a wide range of insights they can gain if they have the right tools in place.
Understanding what to look for when using data analytics to conduct business intelligence activities is a must if companies are to get their sprawling data under control. A recent survey by IMTS US, sponsored by Kognitio, revealed some of the areas in which these organizations will be focusing.
The research asked 200 retail and CPG companies in the US about their business intelligence processes and found the most common types of reports they get are price, promotion and profitability analysis. Almost three-quarters of respondents stated they use this information to guide their decision-making.
This can prove to be highly important to retailers as it can give them valuable insight into what strategies are performing well and where changes need to be made. For many businesses, the key to success in this area will be to get results as quickly as possible.
It will be no good only getting reports into this on a weekly basis, or even less frequently, as this means firms could be unaware of any issues until after it starts to have a serious impact on their bottom line.
This type of analysis can also help businesses identify regional trends, which will be particularly important for national retailers, where the type of promotion that works in one market will have less success elsewhere.
The survey also found product demand and sales forecasting is the next most commonly-received type of business intelligence report, with 61 percent of retailers making use of this.
Other reports that businesses are taking advantage of include market basket analysis and customer segmentation analysis, which were both used by 54 percent of companies. Having the right tools in place to get insight from this quickly can help firms get a better understanding of their customers and ensure they can deliver more personalized offers for higher conversion rates.
The importance of being able to provide line managers with reports that use analytics effectively was highlighted separately by Gartner, which noted there are several challenges for which the use of data will be able to help businesses adapt. It observed that increased competition in the market, higher costs and greater regulatory pressures will be among the factors that drive business leaders to adopt advanced analytics tools in order to make smarter decisions.
It was also noted by the market research firm that real-time dashboards, as well as tools such as mobile BI, will be key pieces of the solution that help improve the pervasiveness of BI and ensure that ordinary business personnel throughout the company are able to take advantage of the insights offered.
The survey did, however, note that progress is being made in some key areas. Nearly two-thirds of businesses stated they already have a formal strategy in place for dealing with alternative sources of information. Unstructured data such as that gathered from social media, the internet and email will have an increasingly important role to play in the coming years for retailers looking to better understand their customers.
More information on the survey can be found online at www.kognitio.com/survey. Businesses are encouraged to contact the firm to receive a presentation with the details of the survey.