How Retail Business Intelligence Can Improve Customer Service
Retail has long been one of the most data-focused industries globally.
Complex supply chains from suppliers to distribution centers – and then the network of stores – has ensured that retail companies have been focused on data and improvement to these logistic systems for many years. Most retail companies have used Business Intelligence (BI) to some degree, even if the focus has generally been on the supply chain.
BI helps retail companies to organize data so it can be contextualized and analyzed. This helps in reporting and improving business performance. BI is a tool that directly influences how retail managers make decisions that affect their business.
There are many different areas where BI can influence decision-making, but these are a few of the most critical:
- Stock control and management: managing stock inside brick and mortar stores and integrating this with an e-commerce operation is critical to ensure that products are available when customers want to buy them.
- Customer behavior: the ability to predict how many customers are expected and how other factors and variables might affect shopping patterns – such as cold drinks and ice cream being more popular if the weather is good.
- Personalization: being able to offer an improved and more personalized service to customers by knowing their preferences. Retail brands that do this well can see up to 5.7 times more revenue than competitors that don’t make the effort to analyze what their customers really want.
Some BI can sit directly in the front end and be used by customers. For example, this ‘Smart Cart’ is already being tested at grocery stores in New York. A bar code scanner is built into the cart along with a screen that offers tips and ideas on how to use the products that are being scanned. This is less complex than the Amazon Go type stores that require an enormous amount of infrastructure but more convenient than asking shoppers to download an app so they can scan with their phone.
The beauty of a Smart Cart is that it knows who the customer is – from a simple login – and can therefore offer targeted promotions and time-limited offers. If the cart knows you have loaded up on some rice then it may offer ideas on what to pair with the rice – with special offers if you pick up the suggested items immediately.
BI can directly impact many different retail operations – these are all areas of a retail business where the use of BI can be a game-changer:
- Customer Experience: removing the need to wait in line for checkout and just making the entire shopping process faster, more efficient, and more personal by offering highly relevant special offers.
- Inventory management: ensuring that in-store locations have the right stock levels and e-commerce distribution centers are managing both stock and returns.
- Customer trends: identifying any new trends of behaviors from the customers and suggesting actions to management – such as new promotions or discounts.
Retail is a wide-ranging industry that can also include elements of e-commerce and direct-to-consumer sales. BI is an essential tool for companies in this sector because it not only improves how the business functions in the back office, but it can improve how the customer interacts with the business too. No other single technological enhancement can boast the potential for such a fundamental impact.
Read also about decision intelligence – one area where the companies that get it right will have a distinct advantage over their competitors. And for this reason, we strongly believe that it will be one of the most important IT trends in 2022. Read more predictions and trends for 2022 in our recent blog Which Are The Gartner Top Strategic IT Trends For 2022?