In essence, the purpose of business intelligence is to transform large amounts of data into meaningful insights. Retail companies, in particular, have access to vast amounts of data, such as customer activity in stores, historical purchase data, online sales, product popularity, customer spending, and seasonal trends. Retail business intelligence is designed to take this data, analyze and process it, and present it in a clear and concise manner. The resulting insights can then be used to maximize profits and sales. So, how do companies use retail business intelligence?

Retail business intelligence in practice

Retail business intelligence is a standard solution used by the largest retail companies and chains in their everyday work. These companies utilize this tool to:

Manange stores

Ensuring consistency and high-quality standards is crucial for maximizing profits, especially for retail companies with a large global presence. Managing multiple stores across different countries and continents, as well as maintaining communication and high standards, can be a daunting task. Take Walmart, for instance, which owns around 11,500 stores in 26 countries and employs over 2 million people. With over 50 different brands to manage, Walmart uses retail business intelligence extensively to tackle these challenges. One of the primary uses of BI tools for Walmart is managing and improving pricing and planning, online operations, HR and EB, and customer insights, as per their website.

Optimize processes

Another crucial aspect of retail business intelligence is its ability to identify significant patterns in sales, procedures, inventory, and margins at each country or store. This knowledge enables you to monitor progress and optimize processes across all your stores, allowing you to improve the way they operate. With valuable insights into why some stores are underperforming and why customers are not purchasing certain products, you can make data-driven decisions to maximize profits.

Monitor customer trends

In today's dynamic market, it's crucial to keep up with the constantly changing trends to win over your target audience. This is even more critical in the COVID-19 era. For instance, when the global lockdown occurred in early 2020, the e-commerce sector saw significant growth. People turned to online shopping to buy basic necessities as brick-and-mortar stores were closed.

Companies that failed to recognize this trend early on suffered losses. However, it's difficult to predict the next significant trend. Therefore, if you run a retail chain, you need to be vigilant and respond to trends as quickly as possible. Retail business intelligence can help you achieve this by providing in-depth data analytics.

Enhance offer

Retail chains are constantly striving to provide attractive products that customers want to purchase. To do so, they continually monitor their product offerings and introduce changes to pricing, specifications, and other aspects of their inventory when it's beneficial. By doing this, companies can maintain an attractive offer in ever-changing market conditions. For example, Lidl, an international discount supermarket chain, entered the US market in 2017. Lidl's offer is based on various themes and "weeks", such as the "French Week" or "Meat-Free January". They offer special deals and incentives to attract customers to purchase specific products or cuisine types.

Compete effectively

The retail industry is highly competitive, with numerous entities vying for customer attention. To remain competitive, retail companies must constantly focus on effective competition. This is where retail business intelligence can be incredibly valuable. With the right business intelligence software, you can:

• Monitor your competition around the clock
• Analyze your and your competitors' products and pricing
• Forecast trends
• Monitor performance

Clearly, retail business intelligence should be a central component of your sales and business strategy. By optimizing costs, maximizing profits, responding to market conditions, and staying one step ahead of your competitors, retail business intelligence can help take your company to new heights. However, achieving this requires following certain rules. What are these rules?

How to maximize profits through retail business intelligence

To maximize the potential benefits of retail business intelligence, it's crucial to adhere to specific guidelines. It's essential to remember that BI is not a one-size-fits-all solution but a tool that needs to be utilized correctly with a particular objective in mind. Here are some recommendations to follow:

To maximize your profits through retail business intelligence, it's essential to consider your objectives and goals.

To start with, it's essential to identify the specific objectives you want to achieve using retail business intelligence. You cannot address every aspect of your business simultaneously, so it's better to focus on 2-3 major goals. Once you start seeing results, you can consider expanding your BI strategy.

Maximize profits through retail business intelligence: Analyze and gather data

Before utilizing retail business intelligence, it's crucial to ensure that you have access to the necessary data. This involves identifying all potential data sources, such as customer monitoring solutions, and implementing an analytics module, such as Google Analytics, to gather and clean data. Additionally, it's important to assess your current data infrastructure, including any data warehouses or repositories in place. Answering these vital questions is crucial before proceeding with retail business intelligence.

Maximize profits through retail business intelligence: Choose the right tool(s)

Choosing the right retail business intelligence software can be overwhelming due to the wide range of products available in the market. To ensure you make the right choice, it is important to conduct research, identify your specific needs, and analyze the information you already have. When selecting a product, ensure it is safe, intuitive, easy to learn, and provides clear data visualization. The importance of data visualization cannot be overstated, as it enables you to make informed decisions based on readable and understandable data. Without proper data visualization features, making well-informed decisions becomes much more challenging.

Maximize profits through retail business intelligence: Find a reliable partner

If your company lacks sufficient in-house resources to handle retail business intelligence, outsourcing may be a viable option. By partnering with a reputable BI consulting firm, you can receive comprehensive support throughout the entire process. The consultant should be able to assist you in selecting the best tool, provide training on how to use it or utilize it on your behalf, and set everything up. It's worth noting that implementing retail business intelligence may necessitate some adjustments and modifications to your IT infrastructure for optimal efficiency. A dependable BI partner will recommend any necessary changes and assist you in implementing them. At Divaaco, we specialize in AI and business intelligence consulting. If you're seeking a partner to help you navigate the complexities of retail business intelligence and data science, we are here to assist you. Contact us today to schedule a consultation with our team and discover how we can collaborate to achieve your goals.