If you’re a savvy business owner, you know that data has become a crucial commodity in the digital economy. Companies that fail to digitally transform and integrate data and analytics into their business processes are missing out on strategic sales and marketing opportunities and will struggle to remain competitive in a changing marketplace. And retail stores are no exception.
The metrics and measurables in your business — from footfall counting and sales conversions to stock levels and spend management — should always be tracked so you can effectively gauge the performance of your retail stores. However, this is easier said than done. Without an efficient system to track, combine and create actionable insight from multiple data points in your business, numbers alone are not very helpful. How are retail stores overcoming these issues then, you ask? The answer is simple: retail analytics.
So, what exactly is retail analytics, and how are brick and mortar retail stores cashing in on the benefits of retail analytics? In this blog article, we’ll look at what retail analytics is, its use in the digital economy, and what it means for your business.
What is Retail Analytics?
Retail analytics is the technical term for the process of collecting and analyzing business-wide retail data. The type of data collected for a typical retail store could include:
▶︎ Customer data: Net promoter score (NPS), customer retention rate, churn rate, customer loyalty.
▶︎ In-store data: People Counting, foot traffic, dwell time, queue time, transaction counts, and conversion rate.
▶︎ Inventory data: Stock turn, gross margin return on investment (GMROI), and sell-through rate.
For example, if you combine your transaction counts from your POS system and foot traffic data from your people counting system, you will gain insight into your conversion rate. It is a crucial metric that tells you the ratio of store visits to the number of people who actually bought something.
Data analytics impacts just about every area of a retail business, from sales, marketing, and customer experience to stock control, staff management, and overall operations. Quite simply, retail analytics gives you insight into how your business performs and how you can improve and optimize processes for ultimate customer satisfaction and maximum ROI.
Retail stores can use retail analytics to identify problems they may be facing in their stores, for example:
▶︎ Long queue times
▶︎ Low conversions between foot traffic and sales
▶︎ Poor customer experience ratings
👍🏻 Benefits of Retail Analytics
There is no doubt that retail analytics gives businesses a competitive advantage, but only when appropriately leveraged. Let’s take a look at some of the ways stores can use retail analytics to benefit themselves.
✓ Improved customer experience
Getting to know your customers and how they behave is integral to creating strategies that will make the shopping experience enjoyable. Analyzing customer data like dwell time, conversion rates, abandonment rates, and queue times, and being alerted to real-time issues, enables you always to put your customers first. You can ensure that:
▶︎ Customers are served promptly with access to in-demand products;
▶︎ Customers can navigate your store and find products effortlessly;
▶︎ Customers will not be subjected to overcrowding or excessively long queues.
▶︎ Customers will be more loyal to your brand.
✓ Optimized staff management
Having access to footfall counts and traffic analysis gives you insight into when your store is busiest, whether it’s a particular time of day, day of the week, or month of the year. With this data, you can plan your staff rosters more effectively and respond to service demands when needed while cutting down on unnecessary resources and expenses.
✓ Better sales and marketing strategies
Being able to measure the success or failure of sales and marketing campaigns is a potent tool for identifying strategies that resonate with your customers. With insight into traffic trends and transactions, you will have a better idea on how best to market and sell your products. For example, suppose a discount campaign on a particular product or specific messaging about a product or particular product placement led to increased traffic and sales. In that case, you can think of ways to replicate those strategies to drive more sales.
✓ Less resource wastage
Effective and continuous retail analytics use can lead to better resource allocation in your business and help you understand what is working and what is not. You’ll have the insight to spend money and allocate resources only towards the strategies, products, and initiatives that drive growth and abandon or optimize those that are not.
Retail analytics solutions for your business
Vemco Group provides reliable retail analytics solutions, including capabilities for people counting, traffic flow measurement, and in-store analytics. We cover areas of any size, can exclude unnecessary factors from counts, and even in challenging conditions, we detect customers with up to 98% accuracy.
We are continuously developing our retail analytics solution, Vemcount, in close dialogue with our partners and customers to meet every expectation and need. Vemcount is configurable, device-independent, and available as a hosted or private cloud-based solution to work seamlessly with existing ERP- and BI-systems.