If I knew then what I know now…
How many times have you heard that phrase? Working with retailers and helping them with IT solutions, I can tell you I come across it all the time.
Every day there are new and better ways of doing business that, had we known about them earlier, would have made things so much faster and easier. The burgeoning field of retail analytics is an excellent recent example.
A retail analytics case study
A few years ago, I was working for a company that partnered with a leading cosmetics retailer to track purchasing trends for individuals who walked into the store. In essence, they wanted to know the percentage of people who were just window-shopping versus those who were coming in to actually buy products.
We installed specialized cameras that could capture and track everyone who walked into the store. They were Bluetooth enabled, so if someone walked in with a smartphone or tablet, we could ping the devices for basic demographic information about the shopper.
As a second prong of the strategy, we provided devices in the store for customers to enter their email addresses for discounts and promotions. With this information, whenever they made a purchase, the system sent an email within a few days recommending a complimentary item. It would be something like, ‘you just purchased this, and you should also buy this other product because it pairs with the model’.
As it turns out, there’s a good reason for the saying “knowledge is power.” The marketing strategies made possible by the collection of information led directly to increased store traffic and increased sales.
The age of retail analytics
I’m no longer working on the frontlines with retailers, instead I now work on the back end helping take care of infrastructure. This new vantage point has convinced me that what I thought was once an outlying use of technology is now a crucial strategy for any retail success.
A few years ago, the percentage of retailers implementing and taking advantage of retail analytics was relatively low. Today it’s a huge area of growth, and it’s not hard to see why. According to research from McKinsey & Company, “Companies championing the use of customer analytics are 6.5 times more likely to retain customers, 7.4 times more likely to outperform their competitors on making sales to existing customers (up-sell and cross-sell strategies), and nearly 19 times more likely to achieve above-average profitability.” So, if you’re in the group who has not yet come around, you have to ask yourself how much longer you can afford not to.
Implementing a retail analytics strategy
The first most important step of any retail analytics journey is ensuring the right IT infrastructure is in place. By infrastructure, I’m referring to the hardware necessary to collect data wirelessly, and sufficient storage and processing power to enable collection, storage, manipulation and retrieval as required – in the cloud or on premise.
This base infrastructure will enable you to access information quickly and reduce the possibility of system downtime. It’s a fairly large and data-heavy platform to put in place, so you need the infrastructure to be able to carry it. But with strong infrastructure, you can go even further finding analytics and cultivating clients.
Your specific in-store approach will depend on what your ultimate goal is. Do you want to supplement your marketing with a campaign to send out personalized promotions notes to your clients? Or are you collecting information for internal use that will allow you to better buy and market to future customers in store?
Retail analytics still evolving
It is crucial to get aboard this train now because it’s only going to move faster from here on. I was recently at an event where an industry expert presented on retail analytics. By the time he had finished, the room was exploding with interest, and everybody was asking him for his business card.
All of this drives home a simple yet important point – retail analytics is not the wave of tomorrow; it’s here today! And before you can start taking full advantage of this opportunity, your first need to think about creating an ecosystem to support it. This ecosystem will equip you with the right tools to execute it successfully.
If you have any questions on the topic, please feel free to reach out. I’d be happy to help any way I can. In the meantime, I look forward to sharing more tips and perspectives on how technology can empower retail success.Visit our website to learn how you can take advantage of your retail analytics.