More Related Content Similar to How Analytics Shaping-Up Modern retail (20) 2. Retail sector can be lauded as one
industry segment which has
undergone an unprecedented
amount of makeover. Starting from
cattle currency, goods-barter system,
metal monies, all the way leading up
to paper and then plastic money,
digital currencies and e-wallets – the
industry has magnificently evolved
from ancient merchant marketplaces
to modern day malls and
ecommerce platforms.
Quite naturally, the reasons of the
revamp lie in the changing societal
dynamics, buyer persona
enhancement, increasing
competition etc. but the major
chunk of onus can be marked
against technology.
RETAIL
REVOLUTION
©Denave
Yes, technology has not only
empowered the buyers and made
them the central axis in this entire
consumer-retailer matrix but also
opened-up a vast area of
opportunities disguised as
challenges, for retailers. The
seamless omnichannel presence,
bot-managed billing counters, AI-
powered recommendation engines,
etc. – the list of tech-enabled
upgrades in retail is endless.
3. ANALYTICS
OVER INSTINCT
The time is long gone when
inventory decisions or expansion
plans were sketched based on guts.
Being an industry sector which sits
atop a huge pile of data – a norm
not from a recent past but date-
stamped from since beginning,
analytics has been a driving force
behind the unparalleled revolution
experienced by this domain.
Shortened product and trend
lifecycles, changing (or even
reducing) loyalty subtleties, newer
benchmarks in online-offline sync
and multiple similar aspects of the
new age retail have made it more
competitive than ever for retailers to
thrive. And that’s where they have
gradually realised the criticality of
adopting retail analytics instead of
remaining stuck in legacy tech
frames, traditional mindsets or just
simply, day-to-day executions.
Retail analytics market is
expected to grow to
USD 8.64 Billion by 2022
(was USD 3.52 Billion in
2017), at a CAGR of 19.7%. (1)
After all, having access to insights
around customer behaviour,
inventory levels, supply chain
movement, sales performance etc.
have armed the retailers with the
ability to take smarter and more
informed decisions, that too, well in
time. And that’s how, retail has now
transitioned from an instinct-driven
to an analytics-orchestrated sector.
©Denave
4. THE GAME OF
CHANGE
When we say retail analytics, it is not
something new which the industry is
practicing now. It’s been there since
quite some time; however, the
leverage has become refined
significantly over time – that goes
without saying.
Retail analytics is a broad umbrella
which comprises descriptive,
diagnostic, predictive as well as
prescriptive forms under itself. With
buyer becoming more empowered
and gaining the control panel access
of the process, analytics has been
the saving straw which has ensured
that such changing behaviour
doesn’t become an intimidating
affair for retailers.
Strategic market placement,
assortment alignment with market
requirement, SKU performance index
information etc. are few of the top-
gun arsenals which analytics equip
the retailers with. With descriptive
and diagnostic formats delving into
the past, or more simply, ‘why did it
happen’ part of the process,
predictive and prescriptive formats
are the ones which have gone
beyond the regular BI-benefits and
given the power of ‘peeking into the
future’ to the retailers.
Global predictive analytics
market is expected to reach
approximately
USD 10.95 billion by 2022. (2)
©Denave
5. With PRESCRIPTIVE
ANALYTICS, you can:
• Simulate the required future
based on analysis and
assumptions
• Provide alerts regarding inventory
exhaustion or increased/
decreased buyer interest in any
product beforehand
• Improvise and optimise overall
operations
• Personalise the customer
experience and foster loyalty
With PREDICTIVE
ANALYTICS, you can:
• Do predictive modelling, i.e.
prepare the ‘if this, then that’
permutations and combinations
• Assess risk impact by analysing
possible outcomes
• Identify patterns
• Mine correlated data
• Anticipate trends
• Prepare apt inventory supply
• Plan offers and campaigns in a
scientific way
THE FUTURE…
IN CONTROL
With majority retailers still pining to leverage the wholesome set of benefits offered
by predictive analytics, efforts are visible across the industry to also perfect the art of
understanding and executing the most complex analytics form, i.e. prescriptive
analytics.
Now let’s dig deeper and understand in detail the precise offerings of these analytic
forms which are shaping-up the revamp of retail.
©Denave
6. DIGGING DEEPER –
CHANGE
ASSESSMENT
Improved Customer
Engagement
Being able to deliver a highly
personalised experience to a
shopper is a sure-shot way to have a
loyalist-in-the-making. User
shopping patterns’ assessment,
search-history mapping (in case of
online shopping), capture of
customer sentiment about what
they’d want to buy etc. can give you
immensely valuable insights and
feeding all those data points into
predictive models can give you
time-stamped information about
what the customer would need and
when would he/ she be expecting to
see it. Thus, allowing you to create a
wow-worthy customer engagement.
Highly Targeted
Marketing Campaigns
With a wide array of data points
available, feeding the same into
predictive engine gives useful
insights on how to micro-market
your product/ service. The era of
mass-campaigns is fading away,
possibly because of the advanced
recommendation engines,
personalised offers etc. which they
experience not just on ecommerce
websites but over social networking
sites as well. Marketing campaigns
which are formulated majorly of
direct messaging, can now also be
administered for the delivery
channel, time, display method etc.
using insights provisioned by
predictive analytics.
©Denave
7. Optimised Inventory
and Store Management
Having a fully stocked-up inventory
all the time is not a sign of
preparedness, but it certainly
scrapes off a lot of bucks from your
pocket without you even realising it.
With predictive analytics, you have
the insights to ensure that inventory
expenses are lessened and the stock
that you have at hand converts into
sales instead of being relayed into
sunk costs. Hence, instead of basing
inventory supply management upon
historic patterns, emerging trends
can be anticipated, and needs can
be perceived beforehand with
predictive analytics.
Revenue Aligned
Pricing Decisions
Right pricing has the power to
propel the customer interest
towards a confirmed sale and at the
same time, incorrect price
fluctuations (read: solely focusing
upon historical data around seasonal
tendencies) can prove to be
disastrous for any brand. This is the
time of dynamic pricing with the
retailers who leverage the analytical
insights for pushing or reducing the
prices in line with collated demand,
competitor pricing, inventory levels
etc., finally grabbing the biggest
piece of the pie.
Efficiency Enhancement
Having the knowledge of inefficient
practices along with the insights on
what will work better, allows a better
resource planning on the part of
retailer. Even for the resources,
having a well-planned strategy
allows them to channelize their
energies in the right place, at the
right time. Also, with analytics-driven
automation, a major chunk of
decision-making, which was
completely manual earlier (and thus,
time taking and error-prone), can be
done in much lesser time now. The
end result – significant time-saving
and improvement in efficiency levels,
thereby, directly influencing the ROIs
Revenue Increment and
Risk Decrement
Now with even financial sector
availing the benefits of prescriptive
analytics to lessen credit risks and
avoid future frauds, no iota of doubt
has remained existent in terms of
the efficacy of prescriptive analytics.
Retail domain, leveraging the power
of prescriptive modelling, provisions
carrying out thorough testing in
simulated environments before
rolling out massive campaigns, thus
having requisite course correction
measures in place, that too, well-
beforehand. Thereby, allowing a
safety varnish over the incremental
revenues while safeguarding against
the risk of failures.
©Denave
8. NAVIGATING RETAIL
SUCCESS…THE
ANALYTICS WAY
With so many benefits under the
belt, it won’t be an exaggeration to
say that while analytics has an
immensely major role to play in
shaping-up modern-day retail,
however, it is its predictive and
prescriptive branches which are
reshaping the retail dynamics in
entirety and making it future-ready.
Granular data analysis, scientific
generation of correlations, making
sense of random data sampling, etc.
– such behind-the-scene nuances of
these analytical operations are
giving a grand view into important
factors like customer engagement
evaluation, share of wallet
assessment and customer churn
prediction etc. As a result,
everything ranging from sourcing,
assortment planning, inventory
replenishment to planogram
preparation, supplier management,
new campaign launch etc. have
gotten a scientific facelift.
With a constant data flow inlet into
analytics engine, retailers are better
equipped than ever when it comes
to quick and informed decision-
making. If you’re amongst the retail
players who are still sitting on the
fence, the time has come to take the
analytical plunge because it is more
like ‘now or never’ in this ever so
competitive colosseum of retail. And
with stakes so high, adoption is a
better choice than avoidance – the
final word.
©Denave
