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Why Retail Analytics Are So Vital

June 20, 2016

The phrase “retail analytics” usually brings to mind a profit/loss summary, but good analytics are much more than that. Retail analytics are actually about taking a periodic, hard look at your business and determining which metrics are growing or hurting it. Retail analytics help everyone involved in the business, from company owners to employees to customers. If you’re unfamiliar with how to use retail analytics, read on to learn some basics for your mental toolbox.

Building Brand Loyalty

People leave traditional 9-to-5 jobs and start their own businesses because they’re passionate about a product or service that’s unique to them. The challenge behind moving that product or service often becomes building brand recognition. With retail analytics, you can easily determine which customers shop in which channels and whether those are brick-and-mortar or online stores. You can then tailor your branding to meet their specific needs.

Retail analytics will also tell you which branding methods and incentives work best and which you can easily build on. For example, you might own a discount grocery store that sells organic foods at more reasonable prices than customers can get at an average market. One of your incentives might be a club card on which customers tally points. When customers reach a certain number of points, they can turn their cards in for rewards, like a large discount. Retail analytics will let you know how many customers have these cards, whether they’re tracking points, and which incentives get the most attention.

Better Customer Engagement

Online shopping is becoming the preferred buying method for more people. This is great news for many businesses, but without retail analytics, it can be difficult to keep up with the number of customers you have and what they need from you. Retail analytics helps streamline and organize the mountains of data entrepreneurs deal with every day.

Thanks to retail analytics, business owners and customers can now keep their data literally at their fingertips. Let’s say your company is a boutique for work-at-home parents who need products to make their workday easier and offers products to keep children entertained during the workday. When a specific customer comes in, you can use retail analytics to look up his or her name and what he or she purchased in the past. Then you can match the customer with new products similar to ones they like, such as a desktop organizer or a particular brand of educational toys.

Better Money Management

One of the most important parts of retail is dealing with money: how your employees are paid as well as how you determine your own salary, overhead costs, and other factors. Without analytics, the financial side of a business gets confusing quickly. However, you can use retail analytics to find answers to all your financial questions.

For example, perhaps you’ve noticed a certain brand of sneakers you sell in your sporting goods store is more expensive than it used to be. However, you can’t remember if they were the same price last month. Retail analytics can help you determine if the price increase is sudden or gradual, which in turn helps you figure out how to sell those sneakers effectively. You’ll know whether to increase your prices, switch to a new brand, or do something else entirely.

Other Key Questions Retail Analytics Can Answer

What Do We Need That We Don’t Have?

Sometimes, clients or customers leave a business because it no longer has what they’re looking for or consistently doesn’t carry a product they need. When looking at retail analytics, ask what consumers are buying elsewhere. Consider whether you can begin selling the same products.

How Should We Mix Our Products?

Some products will always sell better than others. The key is to determine how to mix your products for optimum sales. For example, retail analytics can give you an idea of how to arrange product displays to attract customers’ attention.

Is the In-Store Experience Positive?

Even if you rely heavily on online transactions, your customers have a positive or negative interactions with your store. Retail analytics can give you an idea of who is having what types of experiences, why, and how to make them more positive.

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