With BI tools in their hands, retail companies become smarter, improve their decision-making process, and enhance their operational and financial performance. Stronger data means a better understanding of customer behaviors, needs, and pain points. And that’s what is critical for the success of a retail entity.
In this article you will learn which types of BI tools are available on the market, as well as what kind of benefits they provide to retail companies.
One of the most widely used BI tools is smart reporting. It enables generating automated reports, tracking multiple metrics and KPIs such as sales margins, cost fluctuations, depreciation of assets, and much more, so you can understand the insights hidden in your activities for a certain period of time and use them to make informed decisions.
In the previous article, we had a close look at dashboards in general and dashboards in our Inspector Cloud solution. A dashboard can be characterized as a console in which all business data is collected and analyzed. Dashboards help to track metriсs KPIs, and progress of objectives, and visualize the results in a simple and easy-to-understand way. We previously mentioned the following important metrics to be tracked in a retail audit by Inspector Cloud: products’ on-shelf availability (OSA) and their share of shelf at a store, planogram compliance, neighboring products, product damage, retail price, product location, consumer feedback on products, availability of point of sale materials (POSM), and others. When it comes to dashboards in BI tools, the main idea is to help retailers to track key business performance metrics, such as CTR, conversion, customer retention rates, inventory turnover, year-over-year growth, and others.
One more important dashboard feature is implementation of real-time data tracking and further data visualization to obtain instant updates. This approach helps achieve better control of the operations.
Data mining is another BI solution. It’s an automated pattern-identification tool designed to examine databases containing previously collected information and discover patterns in them.
The essential techniques forming the basis of data mining are classification, clustering, regression, and sequential patterns. These techniques are extremely valuable for retail organizations, as they simplify automated trend and pattern identification. Using data mining tools, retailers can obtain a deeper understanding of business processes relating to customer satisfaction, marketing promotion efficiency, and prices, as well as lots of other metrics and KPIs.
Predictive analytics is somewhat similar to data mining. It also helps examine data obtained previously and generate insights based on it. However, it provides even more features and enables you to use those insights to forecast and project future situations, circumstances, and risks. It does not report current trends and patterns like data mining does.
Predictive analytics can be a tool of great importance, as it can help retailers to implement an efficient competitive marketing strategy, as well as detect operational and financial risks to prevent any future losses. Predictive analytics can be of use in cases of forecasting customer demand and shopping behaviors, identifying the best time for marketing promotions, and more.
An OLAP cube is the foundation of other popular BI tools, such as reporting and data mining. It is usually multidimensional data from various sources, unrelated, distinct or even siloed. The key task of the OLAP cube is to present data in a logical sequence so it can be easily analyzed.
This kind of tool allows you to see data from multiple points of view, prepare a budget for the next financial period, access detailed and dimensional data, and solve complex business issues in a smart way.
How retail business can succeed with BI software
Here is a short list of what should be done before BI tools are implemented in your company:
- Create a list of clear tasks and goals that BI tools can help with.
- Choose a BI solution developed for retail business, so all the necessary processes and metrics will be delivered to you.
- If you have a few vendors to choose from, find one who you can trust and who provides support and maintenance as long as possible.
- Make sure you’ve got colleagues who have all the necessary experience to work with this kind of tool, or provide your colleagues with necessary training. That way, BI tools will bring you profit and not be a waste of money.
Retail companies strive to become smarter and smarter in order to acquire a competitive advantage and enhance their sales. Some of the most popular and efficient BI tools which help them achieve those goals are OLAP, reporting, data mining, dashboards, and predictive analytics. Those tools help retailers to grow and support their steady development in the long term.