Modern consumers expect a streamlined & personalized service from the retailers with whom they do business. If you can’t fulfill their expectations for an efficient and targeted product offering, many of them will waste no time in taking their business elsewhere.
For retail businesses, garnering insights about consumer expectations from the multitude of data they generate is vital to boosting growth.
While the ability of big data to provide insightful metrics across industries has been well documented, mining data in this way can be a challenge if you are new to the field or lack the tools to effectively analyze your data.
Even if you are conversant with data analysis techniques, it can be hard to generate truly valuable insights when using basic in-app functionality that only scratches the surface of what a powerful data analytics engine can do.
The key to overcoming these challenges and driving growth via data analysis is to mine actionable insights from your data using a powerful, cost-effective, and easy-to-use data analytics solution – such as Panoply.
Why data matters for retail
Retail data analytics enable you to dig deep into your data, helping you derive insights that can give you an advantage over the competition in a demanding marketplace. Using data analytics effectively can help drive customer acquisition and position your retail business to grow by pointing out areas where improvements can be made.
The key advantage data analysis provides retailers is the ability to gain a competitive edge by using their data to make better decisions.
While generating insights from big data has become popular in recent years, the use of data-oriented approaches to drive retail strategies has lagged behind other industries, according to a Harvard Business Review study. The report found that just 5% of the retail businesses surveyed could be classified as data-driven organizations.
How can retail businesses use data analysis?
Retail businesses can use data analysis to reveal patterns in customer behavior to make better decisions regarding product development, pricing, customer interaction, etc.
Data can help inform your decision-making process from the simplest to the most complex issues.
You can reach beyond simple purchasing behavior and incorporate social media activity to help drive marketing strategies tailored to your target demographics.
As the modern business environment has experienced rapid change due to technological and other developments, it's the nimblest retailers who have survived and even thrived, often using data-driven strategies.
Following is a detailed look at some of the benefits of taking a data-driven approach in a retail business:
Personalize the customer experience
Data analysis is crucial to design experiences that satisfy the personalization demanded by today’s consumers. Retail merchants of any size can benefit from the ability of modern analytics solutions to ingest massive amounts of data to generate actionable insights.
You can use these insights to match a customer’s preferences to the experience your brand delivers.
This implementation can take the form of designing products, tailoring marketing campaigns, or making suggestions centered on the products that most interest a customer.
Collecting and analyzing accurate customer data is key to optimizing all of these efforts.
Forecast customer behavior
Customer data provides a window into future customer behavior by allowing you to analyze this information for trends encompassing purchase history, customer behaviors, and other key data points.
This process involves analyzing patterns and linkages discovered when tracking customer interactions with your business at several touchpoints.
By using this data to determine the main factors driving customer purchase decisions, you can forecast future behavior and, in turn, use these forecasts to drive your marketing and product development efforts.
Improve pricing decisions
Given the ease with which consumers can price shop on the internet these days, retailers need as much data as possible when making pricing decisions.
Making these decisions means going beyond simply examining your internal cost/profit analysis and engaging in competitive intelligence gathering to develop a pricing approach that is most likely to be successful given market dynamics.
Pricing data can also help you determine when offering discounts or other promotions are most likely to be successful in helping you sell products.
Improve product display in-store
In-store product location is key to maximizing retail sales.
For instance, products most likely to be bought on impulse typically get placed closest to the checkout register to maximize their sales potential.
Data analysis can help support different product placement approaches by tracking how different strategies perform in real-time.
Reduce customer acquisition expenses
Data analytics enable you to determine which of your online marketing efforts are performing well and which are not. Rather than waiting days or weeks to discover this, as can be the case with traditional marketing campaigns, digital marketing provides real-time or close to real-time insights you can use to optimize your marketing efforts.
Pruning low-performing elements of your campaigns and emphasizing top-performing aspects will help you drive down customer acquisition costs.
Campaign data analytics also helps with scaling paid advertising campaigns, allowing you to boost traffic to those pages and ads demonstrating the best conversion rates.
This targeted approach is superior from an ROI and customer acquisition cost standpoint to dispersing advertising funds across a multitude of channels without monitoring individual channel performance.
Mining your advertising and website data enables you to avoid continuously spending money on approaches that don’t generate a positive ROI. By cutting down on the guesswork involved in marketing, funds that would otherwise get wasted can get directed to channels proven to be productive.
Online advertising should be laser-focused on conversions – any channel activity that doesn’t ultimately lead to conversions and revenue should be avoided.
Improve the online customer experience
When consumers visit your website, they create data points that can be used to mine valuable insights into what is and what is not working on your site.
Statistics like: bounce rate, average time on page, conversion rate, and more can be used to fine-tune your site and make adjustments so that it's more enticing to visitors.
The longer visitors remain on your site, the more likely they are to convert and the better your conversion rate is likely to be.
Customer persona identification
Customer data is useful in segmenting your customer base by demographic and other categories to better understand who and where your customers are.
By compiling the characteristics of your best customers, you can develop an ideal customer persona to use in product development and marketing activities.
Given the ability of digital marketing to precisely target specific groups of people, having a clear understanding of your model customer persona is vital to optimizing your marketing campaigns.
How Panoply can help your retail business
Retail businesses can use data analytics to generate insights that boost growth by improving customer acquisition success, setting the stage for revenue growth.
Using Excel spreadsheets or in-app analytics provided by e-commerce shopping portals can offer some basic analytical info. But, optimizing your data analysis to generate the type of insights that provide a competitive edge requires a better solution, one capable of comprehensively ingesting and evaluating your data.
Such apps can delve into data from a variety of sources, unlike less robust analytics solutions.
With Panoply, you can access high-level data analysis with little coding needed to connect all of your data sources.
We automatically store raw data in tables that enable the delivery of analysis-ready data in just a few clicks.
Using Panoply frees up data that would otherwise get trapped in disparate databases, files, and tools. When data get siloed in this way, your team can find it difficult to access in a timely manner.
In such cases, business users may find themselves waiting weeks for metrics generated from non-standard reporting – or even be forced to go ahead without it.
Panoply unblocks this data, providing your data analysts with the input they need to deliver high-level insights.
Panoply allows business users to gain rapid access to relevant data that supports improved decision-making. It enables your retail business to make the most of its data by providing you with access to a wealth of high-level metrics that can be used to drive performance enhancements.
The insights you derive from these metrics can help set the stage for improvements in operational efficiency, boost your customer acquisition and retention efforts, and, ultimately, help spur growth.