8 Benefits of Harnessing Business Intelligence for Retail Industry

Business intelligence (BI) in the retail industry is now more critical than ever. Customer data can be used to beat the competition and identify behavior and patterns, determine which services and products are selling (and which are not), and how to target new markets to reach new heights.

What is Business Intelligence (BI) for the Retail Industry?

Business intelligence (BI) is the practice of utilizing data to find valuable information and insights on customers that can be utilized to make informed and smart business decisions. Achieving business intelligence needs a technology-driven process to collect, store, and manage data to be ready and accessible to be analyzed.

Why is Business Intelligence crucial for Retailers?

Retail is more fast-paced and ultra-competitive than ever before, and when it comes to beating the competition. The rise of eCommerce has given consumers more options than ever. BI tracks how customers interact with eCommerce stores, and this information can be utilized to intensify the consumer service and shopping experience. For instance, a consumer may receive suggestions based on recently viewed products.

Ecommerce also lets retailers make smart, efficient decisions based on customer behavior with business intelligence. This data can be viewed in real-time, allowing businesses to adjust prices quickly or alter merchandise offerings.

This information is also essential for brick-and-mortar stores, which can utilize BI to balance inventory between in-store stock and online to provide cost-effective shipping options, such as buying online and picking up in-store. More and more brick-and-mortar stores offer that option, including Best Buy, Walmart, Old Navy, and so on.

Kohl’s approach: When consumers order, they select the “store pickup today” or “free ship to store” option. They then drive to the appropriate Kohl’s location, park in one of their reserved spaces if available, and head to the customer service point to pick up the order once notified that it is good to go– which can happen within two hours!

Expanded access to operational data and valuable customers also assists organizations to create a consistent experience across all channels. Additionally, BI data can be utilized for predicting when products will run out so retailers can go ahead of ordering and make better location-based merchandising decisions.

Advantages of Business Intelligence and Analytics in the retail industry

What about the additional advantages of analyzing and collecting retail business intelligence data? There are numerous ways, all of which can assist a retailer’s bottom line. Benefits include:

Know where customers are coming from: Businesses can’t only see the physical geographies of consumers (cities, states, etc.) but also how they’re finding their websites and products, such as through referrals or email campaigns.

Track consumer spending behaviors and patterns: Consumer loyalty programs, for instance, are some robust ways for retailers to track spending behavior and patterns. Studies show that 52% of loyal customers will join a loyalty program if offered to them. Members of consumer loyalty programs generally spend up to 18% more than other consumers. This is a significant way to create user-generated content and product reviews and retain customers. There are many instances of loyalty programs, such as:

• DSW has a points-based rewards program where customers are awarded points toward $10 off coupons for each purchase.
• JW Marriott’s loyalty program involves numerous benefits, like free mobile app check-in, members-only rates, VIP upgrades, and so on.
• Kohl’s Rewards program lets consumers receive a free birthday gift and the capability to earn one point for every dollar spent.

Delivering personalized shopping experiences: Offering a personalized experience for consumers will enhance revenue and loyalty. According to a study, “44% of customers say they will likely repeat a personalized shopping experience.”

Obtain visibility into business operations from a supply-chain perspective: Business intelligence in Retail equips organizations with insight into all parts of the purchasing experience, from organizing and packaging to final delivery of the products.

Target and measure marketing campaigns effectiveness: Retailers can witness if marketing campaigns are working and whether customers click on links, open emails, and more.

Understand the wants, desires, and needs of consumers: Businesses can develop relationships with their customers and better understand the connected customer. Many industries now see that customer interaction and personalized engagement are essential for customer retention and growth.

Drive profitability via customer retention: Why are loyal consumers important? According to a survey, a 5% increase in customer retention can translate to at least 25% profit.

Monitoring social media behavior: Retail business intelligence allows organizations to assess SM sentiment to see how products are scoring and track metrics. Merchandisers can also utilize this info to analyze sales and the performance of particular products, stores, and brands. Social media can also be an essential customer service resource. According to HubSpot, 71% of customers who positively interacted with a brand on social media are likely to pass along a recommendation.

Retail Business Intelligence Use Cases

Retail intelligence can also give relevant products a customer may need based on previous patterns and based on what may be in a consumer’s online shopping cart.

A consumer may be shopping for a new computer system; a business can utilize retail business intelligence to suggest a carrying case. If a consumer is browsing for throw pillows at Wayfair and adds one to the cart, the store will offer “recommended accessories’ like- fabric cleaner and cotton blanket. The website also compares similar items and displays users' items that are often purchased together. Business intelligence can also recommend promotions or products to consumers based on social sentiment and past purchasing behavior. Additionally to powerful BI, helpful insights into consumers can also come from Azure Analytics, machine learning, and AI that assist with data science activities.

At Polestar Solutions, our innovative Retail solutions exceed industry standards and ensure customer attraction, acquisition, and retention. Our analytics and custom applications deliver a streamlined and rich omnichannel experience. Book a session to know how harnessing retail business intelligence can help your business.