Mumbai: There are a million things that retailers need to do every day. From creating strategies for attracting new customers to finding ways to retain old customers and introducing exciting offers and brand campaigns, they have to also keep an eye on the fierce competition in the market as well.
But, coming up with strategies and implementing marketing tactics is not enough until you track them right!
Data analytics must be a crucial part of every retail business these days. Whether the website traffic, engagement rates, inventory, revenues, or expenses, tracking every retail marketing metric is essential. By monitoring your data the right way, you can gain meaningful insights and make better, informed decisions for your business.
So, let’s dive into what retail analytics is and how it can be leveraged to make your retail business a success.
What is retail analytics?
Retail analytics refers to collecting retail data and analyzing it to gain meaningful insights into the performance of the business. That is information about their stores, vendors, products, and customers. Retail analytics allows retailers to harness all the data, discover trends, and make predictions based on the current data values.
Types of retail analytics
You can tap into different types of retail analytics that can help you understand the performance of your business in a better way. These include:
In-store analytics: This refers to the methods you use to collect data from your retail store. For instance, foot traffic, dwell time, conversion rate, etc.
Web analytics: You must also know how your website is performing. This includes tracking metrics like website traffic, conversions, and sales.
Inventory analytics: Keeping track of your stock is also crucial in retail analytics. It helps you determine which products are doing better and which are not. The primary metrics here include sell-through rate, stock turn, etc.
Customer analytics: It is all about knowing your customers—for example, customer retention rate, churn rate, customer loyalty, etc.
Importance of retail analytics
When you have all the data you need, you can use retail data analytics to improve various aspects of your business. Here are a few points highlighting why retail analytics is crucial for every retail business.
1. Better sales and marketing tactics
Retail analytics can help you understand your customers at a deeper level, making it easier for you to market your products to the right customers and in the right way. For instance, data analytics can help you find out what messaging attracts more customers or which social media channel has the highest engagement rates. This way, you can improve your marketing campaigns accordingly and drive sales.
2. Improved business management
Retail analytics plays a crucial role in enhancing day-to-day business management. It allows you to predict which products are being preferred by customers these days, and you can make decisions on stocking, tracking, and restocking the units accordingly. You can keep track of how a particular product sells and understand the current demand in the market.
3. Enhancing customer loyalty
Retail analytics helps you keep track of purchase history, shopping patterns, preferences, and other essential metrics associated with every customer. As retail analytics enables you to analyse customer behavior better, you can use this information to provide a better, personalised shopping experience to every buyer.
4. Better in-store operations
With in-store retail analytics, you can make changes around your store to attract more customers and increase your sales. For instance, you can determine which store layouts attract the customers the most or which product placement draws maximum attention. You can enhance your staffing, include appealing designs, and implement effective sales tactics to make your offline store a hit.
Data analytics is not as easy as it sounds
Many marketers these days struggle with data analytics. According to Marketing Revolution, 57 per cent of marketers incorrectly interpret data and likely get incorrect results. The main problem that retail marketers face these days is the lack of data which leads to:
Uninformed decisions and underachieved goals
Poorly performing campaigns since marketers have no idea which aspect of their campaigns to improve
Unnecessary investment in data analytics tools and vendors
How to utilise retail analytics for your business?
Retail analytics can help take away the guesswork out of your business. It gives you a reality-check of how your business is performing and enables you to keep track of every aspect of your business, from sales to inventory and customer experience. Here’s how you can overcome data analytics problems and make use of retail analytics better.
1. Integrate various marketing channels
Keeping data from different sources distinctively makes tracking it a difficult task. The first step to retail marketing involves connecting all your marketing channels to a single data platform. Bring data from multiple marketing channels to a centralised place so that you can track data, find patterns and understand your customer journey in a better way.
2. Real-time tracking
Track the critical metrics every single day! Real-time tracking allows you to understand the current market situation. This way, you can take immediate action and see results. You can send the proper communication to your customers at the right time and promote your sales.
3. Represent your data visually
Do not just rely on spreadsheets for retail analytics. Make use of charts, graphs, and funnels to understand every little detail. Visual representation of data will also make it easier for you to identify patterns and understand the performance of your business in a better way.
4. 360-degrees retail analytics
This is considered one of the most important analysis tools for a retail company. It is a compact, easy-to-read, insightful report that combines all the customer metrics in one place. For instance, a 360-degree customer profile helps you understand their buying history, interests, preferences, shopping patterns, and demographics.
5. Access analytics data from anywhere
Data should be available to retailers at all times and across platforms. This means you should be able to access and manage your analytics dashboards at any time from your laptop, tablet, or even mobile phone. This way, you can share this data anytime, from anywhere, with your team and keep track of your retail business performance.
Some tips for better retail analytics:
Here are some essential tips that retailers should keep in mind to ensure a successful data analytics process for their business.
1. Focus on key metrics
There are different key performance indicators (KPIs) in retail marketing. But, not all of them might work for all retail businesses. So, you must find out which metrics affect your business the most and are relevant to you. Track them and make the best use of retail analytics. Some important retail marketing KPIs include:
Customer retention
Average transaction value
Conversion rate
Foot traffic and digital traffic
Sales per square foot
Inventory turnover
Gross margins return on investment
2. Be consistent
Retail analytics should be something that you do regularly—for instance, weekly or even daily. When you track the metrics constantly, you understand the various factors bringing that change in a better way. For example, if you follow your sales weekly, you can quickly determine if your sales are dropping and immediately take action.
3. Connect different metrics
If you want to gain clear insights into the performance of your business, you need to relate the various metrics and analyze them. For example, foot traffic should be associated with the number of sales to determine whether people entering your store are actually buying your product.
4. Collaborate with your team
Clever algorithms and practical tools are essential, but so is a team that can study the results and gives its opinions. Talk to your staff and understand what they are experiencing on the frontline. Then match their experiences with the results from the numbers you have collected. Allow your team members to bring in different perspectives in analysing and interpreting data to create better marketing strategies.
5. Use intelligent tools
Last but not least, find a tool that can help you maximise your retail analytics efforts. Pick up a tool that can help you collect, measure and analyze data all in one place. You should be able to spot long-term trends, track every metric, integrate with other tools or applications, and access data from anywhere you want.
Gain a competitive advantage with retail analytics
There is no denying that data can do wonders for a retail business. But, it is essential to note that data alone cannot do everything. You need the right analytics tools to extract the correct value from the data you have collected.
(About Author: Pranav Ahuja is the co-founder and CEO of Xeno)
