Retail analytics is the process of using retail data to identify trends, patterns and consumer purchasing behaviours. Retail analytics can be used to predict outcomes with more accuracy and make better business decisions. Retail data includes consumer, sales and industry data.
The goal of retail analytics is to transform data into quantitative insights that go on to drive high-level decision-making. Retail data analytics plays an important role in just about every aspect of retail, from sales and marketing, to operations and inventory.
For instance, retail analytics can be used to help companies deliver personalised promotions, optimise marketing spend, predict better supply and demand, and attract new customers.
In short, retail data analytics is about utilising the power of your data, and using it to form strategic and sophisticated business decisions.
The importance of retail analytics
A business decision that isn’t informed by data is essentially a shot in the dark. Your customers might surprise you. Retail analytics takes away the guesswork.
For example, you might think your target market are more likely to buy if you offer 10% off, when in fact they’re more receptive to free shipping.
Additionally, the online retail space is growing at an incredible rate, and we have seen some major shifts in consumer behaviour in light of the pandemic. As retail data grows more and more rich, ignoring it would see you miss out on a huge opportunity.
The benefits of retail analytics
The use of retail analytics brings with it a multitude of advantages that will put you on top of the competition.
Here are some of the main benefits of using retail data analytics, as well as some examples of how you might use them in the world of retail.
1. Customer behaviour insights
Retail data analytics can give you a 360-degree view of your customers, which goes beyond age and gender. Find out your customers spending habits, likes, hobbies, behavioural patterns, and much more. This kind of single customer view knowledge is invaluable; it can help shape everything from your communication channels to the promotional offers you run.
For example, looking into the spending habits of your customers can arm retail companies with a valuable insight into the type of products they prefer, how much they usually spend, and when they make purchases.
As a result, you can make personalised recommendations that they’re more likely to purchase.
2. Improve marketing campaigns
Marketing efforts that attempt to appeal to everyone will appeal to no one. You need to find out exactly who your customers are, and speak to them in their language. How do you do this? By listening to the data.
Retail analytics help develop impactful marketing campaigns, that are more likely to convert and show promising ROI.
For instance, if the data is showing you that ethically sourced and sustainable products are popular within your target market, then you can emphasise and promote products that fit that criteria.
3. Choose the right channel
Not only can retail analytics inform the tone and content of your marketing campaigns, but the media by which they are delivered on, too.
For example, an analysis of your retail data could reveal that your desired customer is more receptive to Facebook ads than they are to direct mail marketing. As a result, you can choose your channel of communication accordingly.
Your campaign could be perfect, but if it’s not run on the right platform, it will fail. Retail data analytics can ensure that you’re making wise, well-though-out decisions. And, whilst this analysis cannot always guarantee success, it does increase the likelihood of it.
4. Optimise your operations
Retail analytics can help you better predict supply and demand. Analysing spending habits and sales will help you identify which products and services are in demand.
Again, retail data analytics offers you the opportunity here to take away the guesswork. Your orders and inventory can be led by the data. In turn, you can maximise profits by not wasting money on stock that won’t sell.
5. Increase customer satisfaction
If your customers consistently abandon their carts at certain points in the sales process, or sales consistently dip on a particular national holiday, this will be reflected in your data. As such, it means you have the power to do something about it.
Perhaps there are too many steps at the check-out stage, or the free delivery on orders over a certain amount is causing customers who don’t meet that threshold to abandon the purchase.
You can design a better customer experience by knowing what keeps your customers coming back and what drives them away.
You can significantly increase your store’s customer satisfaction by making these changes based on retail analytics. Since you’re likely to be rewarded for this with their loyalty, it’s a win-win situation.
These advantages have the potential to bring about invaluable business results. Firstly, they present the opportunity to stop putting your time and resources into products, services, and marketing campaigns that won’t produce a strong ROI. Instead, you can focus your efforts on initiatives that are driving growth.
Secondly, these benefits will drive customer loyalty and satisfaction. Not only can this push sales, but it will also increase brand awareness. Brand awareness can go a long way to securing future sales and expanding your customer base.
As we can see, if you utilise data analytics correctly, you can be rewarded with some impressive competitive advantages.
Retail analytics factors to consider
Though retail analytics can form the backbone of some incredibly smart business decisions, there are still some factors you will need to consider. These include:
1. Be aware of the bigger picture
Make sure that you don’t focus too much on one single metric. Retail analytics can provide valuable insights, but even more so when you connect the dots.
Comparing data sets can provide you with deeper insights, as mixing and matching will allow you to understand the context and see the bigger picture. So delve into your retail data and look for other reports or points that you can then combine.
2. Focus on the right metrics for your business
Retail data analytics can provide you with insights to almost every single aspect of your business. However, every business is different, and metrics that might matter to some, might not to others.
Identify your business goals and priorities, and seek out the data that will edge you closer to achieving these.
3. Combine data with expert opinion
There’s no denying that retail data analytics have the power to provide you with advanced knowledge, that can lead to strategic and successful decision-making. However, it’s still vital to marry the data with human insight.
Combining the data with expert human opinion can take your findings from powerful to unstoppable – so don’t overlook it.
Start your retail analytics journey today
At REaD Group, we are the experts in retail data. Our unmatched retail data services have been proven to drive impressive results for businesses. We can provide you with the tools you need to succeed.
Our retail data services are tailored to your specific needs and variables, that will help you acquire, retain and re-engage with your customers.
Start your retail analytics journey today!