January 29, 2016 at 3:18 PM
As the pressure of intensifying competition mounts, retailers and restaurateurs are looking to reduce costs across the supply chain while boosting customer loyalty. And with consumer influence now stronger than ever, businesses that fail to respond to the demand for improved products and services will feel the impact on their sales figures. Central to this is the pervasiveness of the social, mobile, analytics and cloud (SMAC) era that is redefining traditional retail models that place the consumer at centre-stage.
So it seems that key to achieving a competitive edge in the digital domain is to identify opportunities in the shift toward technology-centric business models. As a central player in the SMAC revolution, analytics is allowing retailers to re-think old concepts and processes to reduce operational overheads, elevate the customer experience and improve profit margins.
This blog takes a look at how retail analytics is being applied to achieve these goals and for even less data-savvy companies to take advantage of the power residing in their data.
Analytics is optimising retail pricing
When multi-billion dollar clothing store, Stage, applied an outsourced predictive analytics model to its customer and sales data to improve profits, one of its goals was to identify the ideal time to reduce pricing on certain items in certain stores. Price cuts typically occur at the end of a season to keep goods moving off the shelves, but their analytics model went against conventional wisdom and suggested the price reductions to be implemented just prior to when sales on items started to decline. A fair amount of skepticism from seasoned employees resulted in the retailer implementing a six-month pilot that measured outcomes based on analytics versus conventional thinking. Analytics took top spot 90% of the time, with sales increasing in virtually every store that acted on the suggestion of the model.
This demonstrates how a big data approach to incumbent ways of thinking can yield significant opportunities to improve bottom lines and create value perception in the minds of the consumer. Stage went on to implement the program after securing company buy-in across all of its stores.
Diners, Drive-ins and Data
Fickle customers, changing food trends, fluctuating inventory costs and tough competition define the playing field of the food industry. This fast-paced environment is notorious for its pressure, narrow margins and long hours, leading many restaurateurs to turn to their data to drive growth, keep costs sensible and improve operations. And the average restaurateur is at no loss for data. According to Pilot Software, a leading PoS solutions provider to the restaurant industry,
“Modern PoS systems are wellsprings of information. Waiting staff with mobile devices capture crucial data each and every time they place an order with the kitchen, including most popular menu items, fluctuations in foot traffic according to times of day, regular customers, dishes that are returned due to unpopularity - the list goes on.”
From the realisation that volumes of customer and transactional data were being continuously generated by its PoS systems, PilotLive was born. The system brings big data capabilities to even the most technophobic restaurateurs. Customer data is analysed for smarter menu designs, trend spotting and also identifying marketing, staff training and upskilling opportunities. Pilot and outourced analytics providers such as Food Genius are giving restaurateurs powerful analytics capabilities minus the required expertise to put the data to work.
Analytics is going mainstream. And that's a good thing
The rise of analytics as an on-demand business process has spurred a burgeoning outsourced analytics market, making big data accessible to companies that may not quite have their heads wrapped around it. With its diverse applicability, analytics offers far too many opportunities to miss and with the industry diversifying to include “just add your data and we'll do the rest” solutions, taking the data leap should be the next logical step for any business.
Image credit: http://www.torqeyeanalytics.com/retail/