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5 Tips For Understanding the Importance of Real-Time Analytics In Retail
We're sure you've asked yourself, what is the importance of real-time analytics in retail? The answer begins with what is possible once you embrace it.
We're sure you've asked yourself, what difference can real-time analytics make in retail, and is it even feasible? With advances in technology available to retailers and their suppliers, these partners can react to business trends faster than ever before. No longer will you have to resort to comparing your sales and promotional performance to last year's results. Industry-leading retail analytics platforms can provide comparisons to previous week and even the prior day - empowering you to quickly adapt to changes in buying trends, pricing fluctuations and even competitive activity.
1. Understand what Real-Time Can Mean
"Real-time" typically refers to the actual time during which something takes place. However, when it comes to retail data, real-time visibility to that data is dependent on multiple factors:
- Schedule of transmission of retailer Point-of-Sale (POS) data from store locations to the enterprise database
- Frequency of transmission from the retailer's database to the analytics platform host
- Data refresh timeline of retail analytics solution by provider
Best-in-class retailers are able to capture POS data in near real-time, and many are able to transmit that data multiple times per day. However, only a few industry-leading retail analytics solutions can receive data and refresh the platform hourly - providing users with access to near real-time updates.
Your business needs information that is accurate and that you can take action on as soon as you receive it. Real-time information is important for this reason alone as it is highly actionable. This is especially important for using real-time data to refine your pricing strategy or promotion while it is running. Information received after the campaign ends will be to late to make any adjustments.
Christmas holiday sales are a good example of an ad campaign that is especially time sensitive. Knowing that Yule Log ice cream is not selling as well as expected is information that you need to receive as soon as possible. That information received after Christmas will not help you pair the Yule Log ice cream with other slow-moving items (like marshmallows or nut toppings) for a store manager's special in time for buyers to put products in their baskets for the holiday.
2. Take Advantage of Real-Time Increases in Data Relevance
Data that you receive in real-time is more relevant than information received about consumers and sales trends collected last year or even last month. It is more useful to your business because the information is based on what drives today's customers to buy and what choices they will make.
If you receive data that is more than 4 weeks old, market conditions have likely changed, category trends have possibly shifted, and your customer purchase behavior may have adjusted accordingly. Both changes in the customer dynamic make the information less valuable because it won't give you a realistic picture of what your customers want in today's market.
3. Embrace the Advances in Technology that Paved the Way
In the promotional campaigns of days gone by, technology was not capable of gathering consumer data in the amounts we do now or so quickly. Software was not capable of analyzing that information almost instantaneously. That's all changed now.
Real-time data analysis allows you to see whether people in your store are buying specific products as well as what other products sit in their shopping carts. With the right tools, this information can provide more insights and perspective than you ever had before. Real-time data can have an effect today on what is happening in your store today, as well as significantly improve your Promotion IQ.
4. Do Not Overindulge in Data Analysis
Just because you have access to more digital information, does not necessarily mean you need to analyze every bit of that information. Be specific about what feedback will be most helpful to your business and let the rest of the information take a back seat. If you do not select data points judiciously, your marketing and category management staff may experience data overload.
This doesn't help your team modify or reverse key business decisions. It just distracts from the important, actionable information. Be sure to select a technology solution that can take this large amount of data, and only deliver the most important information you need to know to make decisions.
5. See Your Supply Chain While it Works
Seeing your supply chain in action helps you identify more opportunities that you can seize today. It also allows you to more proactively identify risks or gaps in your supply chain before they impact your business. This means you can move product deliveries where they are needed, coordinate the flow of materials or information, or even reallocate financing where you need it to support the transport and delivery of goods. In other words, you can make more informed decisions and act quickly. In today's competitive environment, real-time analytics give you the edge you need.
The importance of real-time analytics is clear, and now it's time to take control of your business. iControl's Enterprise Analytics Portal will provide solutions for your promotional planning based on last quarter's results (or even yesterday's) instead of last year. Our Market Basket Analysis can tell you who is buying in what category and what else they are adding to their baskets.
Learn how to gain the most actionable insights to influence future performance by downloading the free whitepaper: An Actionable Approach to Enterprise Analytics.