Every key player in the retail industry has moved or is trying to move to a data-driven organization. To be truly successful in giving customers a consistent experience across all channels, analyzing past and predict future customer behaviors is critical: only real-time data can allow that to happen!
Business Intelligence for omnichannel retail, if performed right, will enable retailers to offer maximum value to the consumer. Given the increasing competitive pressure in the sector getting a real-time single view of the customer activities across multiple channels can also be turned into a major differentiator.
3 major opportunities and corresponding challenges will be detailed in this article: how BI will help retailers know their customers better and therefore predict their habits, how BI can help with improving efficiency around the assortment as part of the inventory management strategy and finally how BI can help retailers know where to focus by enabling channel performance tracking.
Know your customers and predict their habits
The first step for the data-driven retail organization is to collect the right type of data that can help them improve the customer experience and maximize the profit from their multiple channels. Depending on the channel, if it’s online or offline, the selected KPIs will vary: a physical store would like to try different layouts to determine which maximizes the chances of a sale. That optimization will require sales breakdown for each store. Whereas an online shop will rather focus on personalizing customer journeys, which requires data about customers’ purchasing history, browsing behaviors, etc.
The amount of data and the many sources from which they are collected make it quite an impossible challenge for businesses to organize the information and generate insights from it. BI platforms such as ClicData can precisely help with the data cleansing and aggregation to improve data visualization and analytical capabilities. Here are the main data sources that retailers would want to integrate:
- Satisfaction survey data
- Customer loyalty data
- CRM data
- Digital campaigns data
- Web Analytics data
- Sales data
User behavioral data also provide a chance to enhance products as users use them and create online noise around them. This phenomenon impacts creation life cycles in retail turn yearly product release into a much greater release rhythm: smaller adjustments released more often.
To decide on the right changes and keep feeding development cycles upon market needs, analysts and data scientists analyze behavioral data and generate real-time insights. Progressively offers and products become more and more relevant.
Making sense of the online noise as customers search, browse, friend, like, tweet, blog, and shop are also critical to build efficient customers profiles to push new offers via a more sophisticated targeting.
Part of the success of Omni-channel retailers is their ability to provide their target audience no matter where they are. Easier said than done! Managing inventory across all channels can be difficult especially when a lot of them still keep separate inventory management streams.
While there is this perfect service expectation that inventory should be on the shelf at all times, retailers also need to make sure inventory isn’t overstocked which usually results in a massive discount.
Predicting what customers want can help to limit the risks to avoid having to choose between keeping the old-time loyal customer and losing a prospect forever.
In addition to giving the customers what they want regardless of whether they come from your brick and mortar store, your Facebook or your e-commerce site, retailers also need to offer all kinds of services directly related to their inventory:
- Show customers product availability
- Alert customers when inventory could be restocked
- Confirm shipping and delivery dates
- Locate products in nearby point of sale
Your only chance to make this happen efficiently is to have a centralized inventory management system with easy access, and real-time data. Seriously how could retailers monitor inventory accurately to meet consumer demand on any given channel at any time without visualizing in one convenient place everything that is available?
No excuses, if you try to tell a customer that of having something available in-store while telling online customers it’s not available: the effect of not delivery after showing a unique window could be devastating. The targeted assortment is the key to customer real-time satisfaction and Business Intelligence can help retailers improve their assortment efficiency in numerous ways:
- By integrating large volumes of historical information, BI helps retailers identify buying patterns for families of products with similar attributes upon factors such as geography, demographics, size or volume.
- The pre-season analysis will help retailers forecast purchase quantities by size and allocate quantities by the store for fashion items, and
- Analysis of data from past seasons can also ensure the optimal mixture of sizes and styles for the product assortment.
- Tracking financial costs by product and combine that information with sales will result in a truer picture of product profitability to decide on the items to be included or excluded from their assortments.
By grouping inventory information from disparate source systems into a data warehouse that supports trending on both historical and future KPIs, retailers can improve data quality and accuracy and manage inventory levels to avoid lost sales or oversupply.
Focus on the right channel
As retailers are looking to optimize profitability, they need to get a real-time picture of all products’ performance across all channels. Each stage of the customers’ buying process counts to understand which channel has the best ROI. The following Key Performance Indicators are particularly relevant for omnichannel retailers to know where to invest, what to amplify and or what to stop.
1. Brand awareness
Rather than focusing solely on sales, it’s important to consider how brand awareness is been raised. While many retailers today are taking a digital approach to their promotion and advertising, stores will continue to play an important part in boosting brand presence, providing physical experiences between the consumer and the brand. Experiential marketing is also a great way to attract new customers!
Typical KPIs to measure brand awareness are traffic generator and visit rate. The first one will record the numbers of unique visitors to a given point of contact, digital or physical (website, store, social channel…). The visit rate calculates how many times one unique visitor is present comes to the given channel in a period of time.
With omnichannel retailing, knowing the behavior when a customer visits and revisits the different touchpoints before making a purchase can be very useful to leverage the customer journey steps accordingly.
The next measurement to understand each channel efficiency is the conversion rate: the total number of visitors who purchased something over the total number of visitors who came to the given channel. What’s more relevant in the case of omnichannel performance tracking would be cross-channel conversion rate and each channel may contribute to the final purchasing decision.
With this indicator, retailers can get a better picture of what are the real steps to purchasing decisions and the pattern of their habit.
3. Engagement and loyalty
Have you missed out on opportunities to showcase items which would complement something already in your customers’ basket? Just because a customer does not make that step in the store doesn’t mean the experience wasn’t valuable. They may go home and order from you online instead. Targeted promotions and offers are probably the most efficient way to reward customers for their loyalty and it will generate some positive noise quite naturally. Advocacy is a nice way to measure customer satisfaction and can be measured by channel.
ClicData Business Intelligence Platform For Retailers
Connect all your e-commerce and physical stores’ data in a single place. With over 250+ possible connections you can pull your data in real-time and blend it in our built-in data warehouse before building your dashboards. Streamline your data analytics process to make better decisions faster, based on the latest data. Check out our retail dashboard examples.