Topics In Demand
Notification
New

No notification found.

Retail Analytics: A 2023 Comprehensive Guide
Retail Analytics: A 2023 Comprehensive Guide

October 17, 2023

103

0

 

What Is Retail Analytics?

The building block of a successful retail operation is analytics. The global retail analytics market is anticipated to grow at an average annual rate of 19% between 2020 and 2025, in accordance with a report by Studies and Markets. In the next five years, the market will be worth more than $9.5 billion. 

 

What factors contribute to this remarkable growth? 

The straightforward answer lies in its effectiveness. 

Retail analytics removes uncertainties from business decision-making by utilizing concrete data instead of guesswork. This data-driven approach leads to more informed choices, enhancing customer satisfaction and boosting revenues. Consequently, analytics is cited as a critical competency in 90% of corporate strategies.

 

 Why Is It Important to Retailers?

Retail analytics offers retailers valuable insights into the performance of various aspects such as stores, products, vendors, customers, and suppliers. Companies utilize analytics to craft distinct customer segments based on age, demographics, preferences, buying behaviors, and more. Segmenting the customer base allows businesses to target specific regions for product promotion and sales, ultimately enhancing the overall customer experience. This wealth of data empowers retailers to:

·         Identify their target customer personas

·         Observe and understand customer behavior and purchasing patterns

·         Compare customer preferences

·         Identify trends based on location

Examples of retail analytics

Identifying Optimal Store Locations 

 

Retail business analytics is instrumental in determining the best locations for new stores. Manual assessment of land costs, prediction of local demand, and analysis of neighborhood demographics is both challenging and time-consuming. For instance, Starbucks utilizes geospatial analytics to pinpoint lucrative locations by analyzing factors like traffic patterns, average consumer income, population density, proximity to public transportation, and nearby businesses.

 Identifying Cross and Up-selling Opportunities

In-depth analysis of customer journeys enables retailers to spot opportunities for cross-selling and up-selling. Predictive analytics capabilities predict which customers are likely to purchase specific products based on their needs and preferences, allowing retailers to target them at the right time with the right offerings.

Streamlining Shipping and Logistics

Shipping and transportation costs often constitute a significant portion of a product's final price. Retail business analytics aids in determining optimal shipping frequencies and quantities that meet demand while minimizing costs. Route planning capabilities consider various factors such as traffic congestion, weather, distance, and drop-off points to chart the fastest route. Additionally, monitoring fuel consumption, vehicle condition, tire pressure, and driving style contributes to cost reduction.

Tailoring Marketing Efforts 

Analyzing consumer behavior unveils insights into their preferences, likes, dislikes, choices, and purchasing capabilities. Retailers leverage this consumer data to target specific niches and provide a seamless consumer experience, thereby increasing profits. Through automation technology, marketers can identify and interact with consumers via specific channels, enhancing personalized shopping experiences that drive revenue.

·         

Takeaways

In conclusion, retail analytics is a powerful tool that has revolutionized the retail industry in 2023 and beyond. It is the strategic use of data, advanced analytics, and business intelligence to enhance decision-making processes within the retail sector. As we've explored throughout this guide, retail analytics helps retailers gain valuable insights into customer behavior, inventory management, marketing strategies, and operational efficiency

One of the key takeaways from this guide is that retail analytics is not just a luxury but a necessity for retailers looking to stay competitive and thrive in today's dynamic market. It enables businesses to understand their customers on a deeper level, predict trends, optimize supply chains, and tailor marketing efforts effectively. Ultimately, this translates to improved customer satisfaction, increased revenue, and sustainable growth.

Moreover, with the continuous advancements in technology and data analytics capabilities, we can expect retail analytics to evolve further, offering even more sophisticated insights and opportunities for retailers. As retailers continue to embrace and integrate these analytical approaches into their operations, we can anticipate a future where data-driven decision-making becomes the norm, propelling the retail industry to new heights of success.

 


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


© Copyright nasscom. All Rights Reserved.