Survey Results Show Need For Retail BI
December 2012 Integrated Solutions For Retailers
By Russ Hill, senior director, retail, consumer products, wholesale distribution industry marketing, SAP
Innovative technology, particularly business intelligence (BI), is becoming a central priority in retail organizations.
Today, retailers need to wake up in survival mode. In the competitive world of social, mobile, and 5-second attention spans, it’s increasingly difficult to win a consumer’s interest and maintain this relationship. A major part of this challenge stems from the sheer volume of data. Retailers deal with customer data, product data, and data from their own internal business processes. With consumer relationships driving sales and lifetime customer value, turning Big Data into deeper customer understanding has become the key factor separating retail success from failure. As the Integrated Solutions for Retailers survey shows, innovative technology is becoming a central priority in retail organizations — particularly BI.
Due to reader requests, for the first time the 2013 ISR Technology Spending Report included a question about purchasing BI and analytics software. Among those surveyed, 16.5% said they are planning to buy BI and analytics software in 2013. From conversations with customers, I think this statistic will certainly grow next year as retailers increasingly need to turn floods of data into usable insight at the pace customers require.
What Is Retail BI?
Retail BI is the ability to take disparate data and disconnected events and analyze this information in real time to give retailers an opportunity to take action with fact-based decisions and achieve a rapid response to consumer demand. Any type of data now has tremendous potential to provide business value and answer previously illusive questions such as, “What does it mean if one product gets 25% more Facebook likes than others? How will the impending storm affect spending? How does our competitor’s location affect our sales?”
BI in retail isn’t new, but it’s rapidly evolving with improved real-time capabilities and powerful analytics that constantly monitor data feeds from any source, including social media data and location data from mobile devices.
The Future Is Mobile
Where is retail BI heading? To mobile devices. An increasing number of retailers will provide consumers with mobile applications that provide timely, relevant information designed to encourage shoppers to purchase. Consumers want personalized, convenient experiences, and retailers are already responding to this demand with the next generation of customized applications.
For example, one of our grocery store customers has tested a mobile application integrated with our in-memory platform that allows shoppers to view the top 10 offers that are most relevant to their interests. The application acts like a shopping list, helping shoppers make sure they buy everything they need as well as suggesting complementary or alternative products. The application may ask a consumer buying bread if they would also like butter, and in the future it will also include a shopping cart that will let the consumer make purchases directly within the application.
In addition to improving in-store shopping experiences, BI applications will increasingly turn print advertising into an opportunity to highlight specials and drive store traffic. When consumers scan print ads with their phones, the application recognizes a product’s image and pushes related offers to shoppers.
Implementing A Successful Strategy
BI is not a project; it’s a lifetime commitment. It can’t be formulated and executed once, yet yield continued benefits. Goals shift, the data requirements change, and the tools to analyze data and access insight evolve. Data volumes will only increase. How retailers use data to change their businesses, how they take advantage of it to grow sales, and how they leverage it to reduce the bottom line is only limited by their imaginations. The bottom line: BI is here to stay, holding incredible promise for retailers looking to thrive — not just survive — in the retail jungle.