10
September
2014

Retail Analytics: What It Has In Store for Brick-and-mortar Businesses

Retail Analytics for Multichannel Purchasing

Multi-channel Experience is the Need of The Hour

The growing popularity of ecommerce has posed a great challenge against the growth of physical retail stores. While ecommerce sites are using web analytics as a powerful instrument to provide customers with seamless multi-channel purchasing experience, the traditional retail stores, on the other hand, due to lack of infrastructure, are largely lagging behind. In order to sustain the massive competition from their ecommerce counterparts, they are not only opening up for massive I&O (infrastructure and operations) development but also embracing the idea of implementing web analytics to retail environment.

The Problems 

The problem with executing the implementation process lies with lack of information among retail executives. The transition, however, has already commenced but very much restricted among the top-level participants only. What is stopping retail analytics from being implemented and experimented at a large-scale among brick-and-mortar businesses? 

  • Their knowledge about retail analytics, contributing to multi-channel activity, is inadequate and incomprehensive
  • Retailers are unsure about the type of retail, in-store analytics that their respective business would need and what kind of expectation they should have from investment for I&O development
  • The functional limitations raise confusing situation for retailers in terms of figuring out whether the analytics they are using is right for their business and how to use the analytics to the best of its capacity
  • Lack of knowledge in handling the associative tools that would deliver them with desired results in a cost-effective, less time consuming and practical manner

Retail Store and Multichannel Marketing

Retail Analytics, Multi-channel Power Pack Changing Trends

Clearly, integrating retail analytics with multi-channel marketing is an evolving concept and it is still at the nascent stage. There is no single guiding source for multi-channel marketing. However, in order to overcome the difficulties that exist in the path of successful implementation, most of the retail storeowners tend to follow the pioneers, who have championed this method. It is during this course that they start acknowledging respective importance of different parties, namely – marketing, IT, finance, sales, PR, and merchandising in successful execution of the multi-channel materialization. 

As per a recent survey,

  • Only 30% brick-and-mortar businesses are multi-channel already
  • 50% are expected to become fully multi-channel during 2014-15
  • 19% are expected to attain the stature during 2016-18

[Noticeably, it generally takes up to 4 years for an organization to transform itself into fully multi-channel mode]

Retail Analytics: The Key to Unlock Customer Behavior 

Based on the available data, experts are opining that supermarkets and departmental stores would opt for multi-channel structure at the earliest. Why? Retail platform is grossly missing the scope of taking a look at customers’ behavioral analytics. Retailers can barely find any data beyond transactions done, surveys conducted and number of mystery customers. The argument in support of implementing in-store analytics receives a stronger foundation in this light. The process of data gathering for creation of in-store analytics will require implementation of following technologies within a store or a retail environment:

  • In-store Wi-Fi
  • Loyalty System
  • Mobile payment system (such as POS)
  • Queue management system
  • BLE or Bluetooth Low Energy
  • Signage system (NFC/BLE Empowered)
  • Other methods like – smartphone apps, inventory management system or following up with customer suggestions 

Technology that helps Data Gathering at Retail Stores

Overall Gorwth and Valuable Insight about Customers from Every Possible Angle 

The one thing that is encouraging retailers in seamlessly integrating the various channels is the bight possibility of enjoying the positive results, in return, to their business. Furthermore, the prospects of generating higher sales revenue for every channel associated with the business process receive a stronger foundation. Based upon a recent survey, experts have come to the conclusion that such initiatives would increase sales for,

  • Ecommerce: Up to 82%
  • Store Sales: Up to 81%
  • Mobile Market Boost: By 73%
  • Sale via Social Channels: By 66%
  • Call Centers growth: Up to 39%
  • Catalogue sales: Growth up to 35%
  • Boost for other Sales Channels: Up to 13%

Clearly, implementation of retail analytics is not only beneficent for marketing and advertisement, but such initiative also functions as the key resource to improve the overall condition of a business. Issues like customer traffic, footprints, conversion rates are quite common but striking boost that in-store analytics introduces to a retail environment is understanding customers’ purchasing behavior and to which extent they are responding to the in-store promotional efforts. Here follows an array of ways in which retailers find in-store analytics helps a business to grow comprehensively: 

  • Detailed information about customer traffic
  • Information about the niche of customers whose entry has helped in sales generation
  • Customers’ tendency of visiting a particular section of the store
  • Better grip over inventory management (undertaking necessary measures in dealing with out-of-stock situations)
  • Whether or not customers try to compare in-store price of products with ecommerce sites
  • Queue lengths and average waiting time for customers in a queue
  • How many times customers select and unselect branded products
  • Dwelling time of customers at any given region or store segment

Retail Analytics Gathers Everything about Stores
The Pentiful Awaits Exploration 

Introducing web analytics to a retail environment is not an easy task as it requires not only the openness for I&O development but the readiness, as well, to take risk, high motivation for learning and gradually implementing the learnt lessons for overall growth of the business. Multi-channel benefit the brilliant factor that retail analytics introduces. However, it is equally important that retailers gain the ability to manage and integrate the multiple channels to the sole goal of customer convince, which would ultimately result in overall growth and prospect of an organization or business. There are questions concerning ROI, data reliability, need to opt for the newer method and scope of direct engagement with customers, among retailers. More the scope of learning about retail analytics will open sooner the answers will be evident and retailers will start churning the plentiful benefits that the new improvement has in store. 

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