How Retail Data Analytics Can Transform Your Business and Maximize Conversion Rates

In an age where eCommerce giants like Amazon and Alibaba use big data to shape all shopping trends, retailers need to step up their game to stay competitive. Business owners can no longer just sell products; they also need to collect and analyze a vast amount of data to optimize operations and drive growth.

The first step to using data to stay competitive? You need to understand how the retail industry is utilizing data and how other brands have already put it into practice. This article will give the insights you need to start using sales data to better drive the entire business, whether big or small.

What Is Retail Data Analytics?

Retail data contains a wide range of real-time data generated and collected during operations. You can analyze many parts of a retail business including, but not limited to, customer interactions, sales transactions, customer feedback, inventory analytics, social media mentions, employee efficiency, POS data, or competitors’ actions.

With technology that is more sophisticated than ever, retailers can now capture a wealth of data about customers from all channels, creating an omnichannel data strategy. Cloud-based data solutions help aggregate and manage as much data as possible.

By understanding retail data analytics, your business can personalize experiences, optimize supply chain operations, forecast sales accurately, and ultimately increase profit and competitiveness in the market.

In essence, retail data analytics is the essential gear of modern retail, empowering data-driven strategies for better growth and success. 

Which types of retail data analytics are there?

In essence, there are four types of retail data analytics that businesses can use. Each plays an important role in providing today key insights into the business operations and opportunities to optimize sales. 

• Descriptive Analytics – This is the most common type of analytics to help retailers organize data into an understandable story and then describe the situation happening in the business. Example: The quarter sales number tells which store is performing well. 
• Diagnostic Analytics – This is the simplest form of advanced data analytics, which enables retailers to look at data and answer the reasons for specific business concerns. Example: The bounce rate tells why customers are not coming back to complete sales.
• Predictive Analytics – This is another advanced analytic to forecast the future using insights from both diagnostic and descriptive analytics. Example: The previous year’s sales number helps predict this year’s stock requirement.
• Prescriptive Analytics – This is the most advanced type of analytics, which gives retailers good recommendations on the improvement areas. Example: When sales numbers decrease, a set of actions is recommended to improve in 3-month time.

How Can Retailers Use Real-time Behavioral Data To Drive More Conversion?

It is not enough to just collect data. In order to leverage it, you need to use data analytics in everyday operations. Here are 5 ways to drive more conversion by using real-time behavioral data.

1. Understand Customer Behavior In a 360-degree View

The so popular ‘’360-degree view ’’ term; what does it refer to? It all comes down to the amount of customer insights that you can get. Retailers would love to know all about their buyers, including likes, dislikes, gender, social media presence, payment methods, etc. 

Today’s customers have become so connected that they leave behind footprints as they shop online and physically. All in all, this data could prove invaluable to the retailers as a correct understanding of their preferences, inclination toward certain products, or behavior while making a purchase.

For example, POS (point-of-sale) analytics helps gain very specific insights into customer behavior and the popularity of each product. Once you understand a particular customer’s purchase habit, you can then scientifically forecast inventory needs, set up marketing strategies, and have better product development. More than that, an eCommerce POS system can connect sales data from multiple stores and channels, allowing a holistic omnichannel data strategy. A POS system can also integrate with other business tools such as CDP, CRM, ERP, and accounting tools to streamline real-time data and enable merchants to manage all aspects of business operations effectively and seamlessly.

Ultimately, having a 360-degree view of customers through data analytics allows retailers to optimize the customer journey, resulting in more sales and greater satisfaction.  

2. Streamline Operations And Increase Work Efficiency

In supply chains, analytics can be applied in several different ways. Product logs and server data can give clues to how the operation is running upstream. The products can expose bugs in the sales process. Customers can also voluntarily show the product's performance over time to improve personalization (which we will get to later).

By analyzing historical sales numbers, seasonal trends, and all external factors, retailers can make informed decisions on any part of the work process. A good example is how you can prevent out-of-stock and excess inventory while reducing shipping costs. Data-driven forecasting helps owners plan for staff, budget, and seasonal changes more accurately.

Along with the labor force optimization, some other recommendations from retail analytics would be: 

• How store layouts can affect buying decisions?
• How product locations can grab the most attention?
• How service can be cooperated by existing staff?

As retailers are constantly looking for new ways to optimize operations and reduce costs, data analytics can be a powerful tool to maximize the efficiency of your overall operation.

3. Optimize The Customer Experience With Personalization

Consumers no longer buy from generic marketing campaigns, as they are bombarded with 4,000 to 10,000 ads, every day. Retailers need to provide a better and more personalized customer experience, which most buyers have come to expect from brands at this point.

Quality customer data can help retailers tailor product recommendations, communication styles, and promotions to specific individual preferences. For example, if a customer keeps buying running shoes, you can send them personalized offers on the most suitable running gear. Or if the holiday is coming, you can suggest gifts based on items in their wishlist. 

This level of personalization would not only increase the likelihood of repeat purchases but also create brand loyalty. Each customer segment will have different needs, but if they feel understood and appreciated, these consumers are more likely to return and become brand advocates.

Conversely, loyal and long-term customers would also constitute their own segment. These are the believers of your brand and would be the first to receive new product launches or experiment with your offers. By the 80/20 rule, this little group can contribute to more than 80% of your store’s profit. 

4. Enhance The Quality Of Business Service

Think about the last time you had to call for support after purchasing an item. If it’s a big retailer like Zara, the service can be quick and heartwarming. But if you are a medium business with limited staff? The challenge gets much bigger to provide the same level of service, but the customer’s expectation is still the same as with a large company.

However, an analytic customer data platform (CDP) can bring issues to light and then lead to more effective improvement in the service’s quality over time. Imagine having a never-tired staff analyzing every problem that your buyers have ever met. That is the kind of analytics you need to provide top-notch and automated service while keeping the cost affordable.

The simplest way is by analyzing the customer feedback on all channels to find hidden insights that are waiting to be discovered. These reviews shed light on how customers are reacting to products, services, staff, and the overall experience. Sentiment analysis also helps identify whether buyers are talking positively or negatively about your brand.

Then, you can utilize in-store video footage or motion sensors to improve the buying experience. Better yet, data analytics tell you which of the customers’ problems are causing the greatest amount of distress, so your business can address their most pressing issues, and consequently increase overall customer satisfaction.

5. Gain A Competitive Edge Over Other Retail Competitors

As the trend in today’s retail industry is very competitive, it becomes a daunting task to keep up with the competition. The information from data analytics is highly valuable when used to strategize; the actions’ relevance is founded on the fact that with them, retailers can always adjust to new trends in the market as well as new changes in the consumption pattern.

For example, data analysts can point to patterns that are unknown to competitors, but highly relevant among customers. Knowing this, retailers can introduce new products or services to the market and fill in the gap before other players in the market can.

Data can influence various aspects of the business including marketing, customer service, and technology. Such usage allows retailers to try new marketing tools or methods of interacting with customers that may be untraditional but efficient, as well as to apply relatively new technologies like artificial intelligence or augmented reality to make the shopping experience unique for the clients.

Final words

Since the rise of eCommerce, retail has rapidly become a data-intensive industry. Therefore, shortly, making the most out of data by adopting retail analytics will be the top priority for businesses of any size to compete in a consumer-powered economy. When you can extract insights to make informed business decisions, you are on the path to infinite growth while keeping a close connection with the consumers’ needs. And that is how to thrive as a retailer and even stand tall with offers from other big corporations.

By focusing on specific data infrastructure problems, MetaRouter can deliver unique solutions and generate faster marketing innovation for a better competitive edge. Start taking control of your data today by contacting us.

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