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What makes one Saturday sale a rousing success and the next one a total slump? In the past, you’ve probably pinned it on luck, but luck has nothing to do with it. The only thing that can truly pinpoint what makes a product fly off the shelf at any given moment is data. But this isn’t the kind of data that exists in a spreadsheet somewhere; it’s the kind that lets you make predictions on successful products and promotions.
From the moment you swing open the lock on the front door and let in your early crowd until the time the last straggler checks out his brimming basket, your store is a data-collecting powerhouse. You have all the tools available, and with the right Business Analytics (BA) solution, you can capitalize on your new ability to see into the future.
BA provides more than just insights; it’s a plan for the future. In your store, it will help you make the right call on products, increase your margin, reduce your ordering times and improve efficiency.
Not to be confused with Business Intelligence (BI), BA uses historical and current data from your store to create explanatory predictive modeling that will help you make decisions. Basing your order on BI is like using a history book, whereas BA is like using a (scientifically accurate, algorithm-based) solution. It answers questions such as:
- Why are these out-of-stocks happening to these products?
- What will happen if these trends continue?
- If I change something in my POG, what will happen next?
- What is the best possible outcome for my store?
A BA program will measure “product performance” based on several factors:
- Historical store sales
- Current inventory-on-hand
- Industry-wide sales trends
- Supply chain availability
- Social media chatter
- Projected product lifecycle
- Basket adjacency
The result is a retailer with an incomparable product mix who pulls in more sales, manages time wisely and makes better inventory decisions.
Why Do I Need Business Analytics?
By pushing big data to its potential, a retailer can increase its operating margin by more than 60 percent. BA can take this to another plateau with real-time insights. The right tool would synthesize industry-wide trends, social media mentions, product sales projections and your store’s own sales.
More than 2,500 new products are introduced into our market each month. Each product has a unique lifecycle, and by understanding that lifecycle with BA, you can gain insight on potential overstocking or understocking – thus reducing shrink and out-of-stocks and giving your bottom line a much-welcomed boost.
Meanwhile, your competitor is making the best logical decision they can. It’s hit or miss for them, but you’re sitting on a sure-fire solution. All the right products will be in the right place (at the right price, of course).
Other benefits of BA:
- Maximize turns – You’ll be stocking only the items that are hot sellers and producing relevant ads for each.
- Minimize shrinkage – 64 percent of grocery shrink results from inadequate store operations and procedures. Cut your losses with deep insights that will let you know when you should put a product on sale.
- Real-time decision-making – You will know trends as they are happening and be able to gauge changes in real-time.
- Optimize pricing – By predicting consumer demand, you will be able to set optimal prices for selling, which will increase your product margins.
What Should I Look for in a Business Analytics Program?
Although BA needs vary from store to store, the basics will remain the same. To get the most from a BA program, it should have:
- Quick response to fluid data – As things are changing for your store, your BA program should be changing too.
- Integrates easily with your POS and uses past order data.
- Takes information from the latest micro-trends.
- Uses both past and present social media feeds.
There’s no reason to settle with disappointing sales on what should have been a great day. Pick the right Business Analytics tool, and you’ll forget you ever thought those days were just dumb luck. After all, the revenue you’ll pull in will be way more than just lucky pennies.