4 ways through which data analytics is helping big retailers stay ahead of competition

Big retailers across the globe are using data analytics in almost all stages of their business. From analysing the sales of popular products to forecasting the sales and future demand, analytics is helping these large players stay ahead of their and meet customer needs. Predictive simulation coupled with effective marketing strategies are helping retailers in identifying potential customers who would be interested in their product offerings.
Let’s look at 4 ways through which data analytics is helping retailers stay ahead of competition and meet customer needs:

Price optimisation – data analytics plays a key role in determining pricing of a product. Sophisticated algorithms consider various costs, inventory, demand and sales to predict how potential customers might respond to different prices of products offered through different channels. These algorithms also help in understanding when prices should be dropped, which is known as markdown optimisation.

Performance prediction – every customer interaction, whether it is in store or online, has a deep impact on potential as well as existing buying pattern. By use of data analytics, retailers can accurately predict future performance based upon customer experience and use it along with strategic KPI’s to study cause and effect relationship.

Discount analysis – who doesn’t like buying something at discounted price? Retailers use this customer behaviour to their advantage by analysing past purchases, discounts availed to then create offers/discounts that will be profitable for their business as well as meets customer needs.

Reduction in churn rate – ‘Churn’ simply means customers that a business losing out due to competition. It is easier to retain an existing customer then to attract a new one. Due to this, retailers spend considerable time and energy in analysing customers/business lost to then identify the root cause of churn and take actions to reduce this behaviour.

If we go by the all time clichéd adage “Consumer is king”, then we cannot deny the fact that the retail sector swears by it- taking into consideration the transformation it has undergone and analytics is at the core of this drastic transformation. It has restructured the retail landscape and initiated a consumer centric revolution; backed by technology upgrades, digital evolution, and advertising boom. Analytics has rattled the retail scene to make it engaging, targeted, competitive, intriguing and personalized.

To look at the sheer transformation of the retail sector, let’s look at how the retail industry performed before analytics and how it transformed after analytics was implemented.

Since data analytics was incorporated with the retail segment it has seen changes that have acted as a catalyst in its growth. And the future looks promising. With more and more companies realizing the importance of predictive analytics it is here to stay and leave its mark.

Data analytics if merged with technology will open up infinite possibilities. Companies will use loopholes to exploit opportunities. We can say that the future of retail lies in using the insights and simultaneously interlinking technology.

Companies will try to achieve the impossible to stand out from completion and satisfy their consumers. Let us look at how combining technology with analytics will shape up the retail business.