Retail analytics answer the “why” of business performance

Retailers have data at their fingertips that they can use to bring much needed insight into their business operations. Especially as consumer demands change during an uncertain time, retail analytics can help owners and operators understand why their business performs the way that it does.

Retail analytics answer the “why” of business performance

 Make all the right decisions when you know the "whys" of your business

A couple of months ago shoppers might have hopped into their car and headed to the grocery store ready to zip in, pick up a few items and pop out. But, after walking in, they realized the store they’ve been going to for years has suddenly, during a pandemic, decided to entirely reorganize their aisles—and they couldn’t find anything they needed. Frustrated, they left the store wondering about the timing of such a change.  

That might have been the initial perspective of grocery store customers whose trusted grocer wisely changed their store layout to adopt to changing shopping behaviors and social distancing directives. And other retailers also had to quickly find ways to understand how their customers interact in their stores to make the necessary changes.

Now that the initial social distancing measures have been met, to really understand all the “whys” of your retail business, you can use retail analytics to gain a holistic view of your operations across all applications—so you can grow your bottom line.

 What is retail analytics?

In short, retail analytics is the use of analytical tools to give you an analysis of business trends, retail industry patterns and, most importantly, offer meaningful insight into how your business is performing. Retail analytics can help you gauge customer satisfaction, find ways to increase sales, and optimize your operations. It also helps you make good use of all the valuable data at your fingertips that you can’t access otherwise (without a lot of time and manpower).

So, if you’re looking to improve on your key performance indicators (KPIs)—how you measure your success against goals, objectives and competitors—retail analytics can help. And, with detailed information about your customers and your operations, you can gain some of the following highlighted benefits.

 Why: Boosting your customer loyalty is so key

The importance of customer loyalty cannot be overstated. According to Marketing Metrics, you’re 14 times more likely to sell to an existing customer than you are to a new customer. Retail analytics gives you the tools, through segmentation and profiling, to identify your most profitable customer base—and target your marketing and loyalty programs toward them.

And, with the ability to understand your customer’s behavior, you can get to know them to better determine what they’re more likely to buy in the future and what they really value about your services. You can also gain insights into how well your loyalty program is working, what percentage of your customers have adopted it and how often are they using it. If you have a lot of members, but they aren’t using your program then you’re likely not giving them anything they really value (and a customer loyalty program won't last without that).

 Why: Increasing cashier productivity enhances CX

There are some things you should know about how they’re doing their jobs. Like, which of your cashiers makes the most transactions? What about voids? And which of your cashiers is successfully pushing your upsales?

When you gain insight into how your cashiers are performing, you can use it to make a lot of decisions, like when to increase and decrease staffing based on peak hours of operation. Why should you be curious to know how long each transaction takes? If one or more of your cashiers is taking too long checking out one shopper, that can lead to long lines. On the other hand, if your cashiers are rushing customers out the door, they’re likely not interacting with them at all, which can also cost you customer loyalty and retention.

Retail analytics can also help determine if your customers would rather skip your cashiers all together and use self-checkout.

 Why: Decreasing fraud prevention remains a challenge

It’s estimated that fraud is putting a massive ding in the global economy—to the tune of $3.89 trillion in losses growing by 56 percent over the last ten years. Analytics can go a long way in helping you reduce fraud and losses in your business. As reported in the Wall Street Journal, analytics helps mine financial, transactional and other information so auditors can flag areas that need to be investigated. The tools also provide details from audits and inspections for prolonged and effective monitoring.

 Why: Growing sales with sales reporting works

Retailers have taken a big hit during the pandemic and bouncing back from that will take some time now and far after the pandemic is over. Retail analytics can give you insights to:

  • Address any stocking/restocking issues
  • Determine the best pricing
  • Determine and set sales targets
  • See conversion rates
  • Check out how customers are interacting in your store
  • Change store layouts
  • Manage product demonstrations

 Why: Improving the supply chain can be complicated

Supply chains have many moving pieces and staying on top of all of them can put a strain on any business. And when there is a break in the chain that leads to empty shelves, something retailers hope to avoid—now more than ever. Retail analytics gives you more visibility into your supply chain so you accurately predict future demands, reduce inaccurate forecasting, and track inventory and shipments in real-time. That way, your chances of running out of stock or having too much is reduced, and so are the costs associated with them.

 Why: it’s about the bottom line

Insight into all of your operations, understanding why every part of it is running the way that it is, can help you make better business decisions. And that’s going to lead to more customer loyalty—and increasing your bottom line.

According to Forbes, just a five percent growth in customer loyalty can lead to a 25 to 95 percent boost in profitability. There are many aspects about your business that drive you, including the services you provide to people, but without growing your bottom line all the other parts you love about being a retailer wouldn’t be possible.