Customer Data Platforms: Solving the 5 Key Business Challenges in 2023
The ability to provide personalized customer experiences is now an essential component of organizational successDownload the Whitepaper
Business intelligence in the retail industry is now more important than ever. Customer data can be used to not only beat the competition, but to identify patterns and behavior, determine which products and services are selling (and which aren’t!), and how to target new markets.
What is Business Intelligence for the Retail Industry?
Business intelligence is the practice of using data to find valuable insights and information on consumers that can be used to make informed business decisions. Achieving business intelligence requires a technology-driven process to collect, store, and manage data so it is accessible and ready to be analyzed.
Why is Business Intelligence Important for Retailers?
Retail is more fast-paced and competitive than ever before, and when it comes to beating your competition, there’s no such thing as having too much information.
The rise of eCommerce has given customers more options than ever. Business intelligence tracks how users interact with eCommerce stores, and this information can be used to enhance the customer shopping and service experience. For example, a customer may receive suggestions based on recently viewed items.
eCommerce also allows retailers to make smart, efficient decisions based on customer behavior with business intelligence. This data can be viewed in real-time, which allows businesses to quickly adjust prices or alter merchandise offerings.
This information is also important for brick-and-mortar stores, which can use business intelligence to balance inventory between online and in-store stock and provide cost-effective shipping options, such as buying online and picking up in-store. More and more brick-and-mortar stores are offering that option, including Best Buy, Home Depot, JC Penney, Kohl’s, Old Navy, Target, Walmart, and many more.
Kohl’s markets a 1-2-3 “buy online, free store pickup” approach: When customers order, they choose the “free ship to store” or “store pickup today” option. They then drive to the appropriate Kohl’s location, park in one of their reserved spaces if available, and head to customer service to pick up the order once notified that it is ready – which can happen within two hours!
Expanded access to valuable customer and operational data also helps businesses create a consistent experience across all channels. In addition, business intelligence data can be used for predicting when items will run out so retailers can get ahead of ordering and make better location-based merchandising decisions.
8 Benefits of Harnessing Retail Business Intelligence and Analytics
What about the additional benefits of collecting and analyzing retail business intelligence data? There are many, all of which can help a retailer’s bottom line. Benefits include:
- Identify where customers are coming from:Businesses can not only see the physical locations of customers (states, cities, etc.) but also how they are finding their products and websites, such as through referrals or email campaigns.
- Track customer spending patterns and behaviors:Customer loyalty programs, for example, are an effective way for retailers to track spending patterns and behavior. Research shows that 52% of loyal customers will join a loyalty program if one is offered to them, and members of customer loyalty programs typically spend up to 18% more than other customers. This is an important way to retain customers and create user-generated content and product reviews. There are many examples of loyalty programs, including:
- DSW has a points-based rewards programs where customers are awarded points for each purchase toward $10 off coupons.
- Marriott’s loyalty program includes many benefits, such as members-only rates, free mobile app check-in, VIP upgrades, and more.
- Kohl’s Yes2Rewards program allows customers to receive a free birthday gift and the ability to earn one point for every dollar spent, resulting in coupons once a certain threshold has been met.
- Deliver personalized shopping experiences:Providing a personalized experience for consumers will increase loyalty and, hopefully, revenue. According to Forbes, “44% of consumers say they will likely repeat about a personalized shopping experience.”
- Gain visibility into business operations from a supply-chain perspective:Retail business intelligence equips businesses with insight in to every part of the purchasing experience, from organizing and packaging to final delivery of the products.
- Target marketing campaigns and measure their effectiveness:Retailers can see if marketing campaigns are working and whether consumers are clicking on links, opening emails, etc.
- Understand the needs, wants, and desires of customers:Businesses can develop relationships with their customers and better understand the connected customer. Many industries now see that customer interactions and personalized engagement are important for customer retention and growth.
- Drive profitability through customer retention:Why are loyal customers important? According to HubSpot, a 5% increase in customer retention can translate to a profit of at least 25%.
- Monitor social media behavior:Retail business intelligence allows companies to assess social media sentiment to track metrics and see how products are scoring. Merchandisers can also use this information to analyze sales and the performance of particular products, stores, and brands. Social media can also be an important customer service resource. According to HubSpot, 71% of customers who had a positive interaction with a brand on social media are likely to pass along a recommendation.
Retail Business Intelligence Use Cases
Retail intelligence can also suggest relevant products a customer may need based on previous patterns – but also based on what may be in a customer’s online shopping cart.
A customer may be shopping for a new laptop; a business can use retail business intelligence to suggest a carrying case.
If a customer is browsing for throw pillows at Wayfair and adds one to the cart, the store will suggest “recommended accessories” such as a cotton blanket and fabric cleaner. The website also compares similar items and shows users items that are often purchased together.
Business intelligence can also be used to recommend products or promotions to customers based on past purchasing behavior and social sentiment. In addition to powerful business intelligence, helpful insights into customers can also come from machine learning, Azure Analytics, and Databricks that help with data science activities.
Contact our team of specialists today to find out how harnessing retail business intelligence can help your business.