The retail industry is constantly evolving, and in 2022 reached a global sales value of 25.8 trillion US dollars, with a 2026 forecast of 32.8 trillion (Statista). But retail is a fluid and ever-changing industry: external factors, changing consumer behavior, the emergence of new technologies and the non-traditional needs and wants of Gen Z and Millenials are demanding that retailers rethink their way of working.
What should organizations do to keep pace and thrive in such an unstable environment?
Here are the 7 Leading Success Factors with Retail Analytics
- A better customer experience
Don’t think customer experience is that important? Then think again.
According to Forbes, 86% of buyers would pay more for a better customer experience.
Delivering an exceptional experience to your customers is paramount to increase sales, brand loyalty and new clients, as well as to retain existing ones. A company specialized in retail analytics consulting can support you in having a good look at your customer experience and trying to see whether there’s room for improvement.
And investing in new technologies could be the retail analytics solutions your company is looking for. One of the most common use cases of Artificial Intelligence and Machine Learning worldwide is, in fact, improving customer experience.
- Diversification in product portfolio and channels
A company’s diversification strategy is one of the main aspects scrutinized by risk assessment companies. As explained by credit rating agency Pefindo, a good strategy should fulfill all its target market’s needs, include different store formats to cater to different customers’ segments and have good market penetration and geographical distribution.
In order to be successful in the industry, retail analytics solutions should always focus on offering a diverse range of products and distribute them across multiple channels.
- Optimized supply chain and inventory management
Efficient inventory management ensures that products are always available in the right quantity and at the right time. According to a study from IHL Group, overstocking and understocking cost retailers 1.1$ trillion in lost revenue; improving your supply chain management and streamlining operations reduces losses, costs and lead times.
In order to do so, many retail analytics consulting companies are currently suggesting investing in digitalization. In fact, it has been proven that digitalization and AI in the supply chain positively impact a company’s performance, opening up retail analytics solutions for companies looking to grow.
- Leveraging Data-driven insights
The importance of data insights for today’s executives is well-known, but many still fail to leverage the power of data. Nielsen IQ defined investing in Data Analytics and insights “vital” in 2023, especially for emerging brands and brands looking to grow.
CPG Data Insights allow companies to make more informed decisions in all business field, optimize processes and costs, better understand and predict consumer behavior and, as a result of all this, gain a true competitive edge.
But investing in Data Analytics and retail analytics solutions comes with many challenges and costs. That’s why partnering up with retail analytics consulting specialists can be the key to finally being able to harness the true power of data.
- Personalization and precision marketing
But marketing already has changed and keeps changing, meaning that businesses need to adapt and keep pace with innovation and new trends. One key trend in the retail industry is personalization and precision marketing, which is an approach relying on outlining specific target segments and then tailoring highly customized advertising messages to them. The results are exceptional: According to McKinsey, “Personalization can deliver five to eight times the ROI on marketing spend and can lift sales by 10% or more.”
When implementing a retail analytics solution program, an effective and customized marketing strategy should definitely be part of it.
- Efficient and competitive pricing strategy
Pricing is a crucial part of your marketing and sales strategy: in fact, pricing affects the consumer’s perception of a product, and price changes have a big impact on consumer behavior and purchasing decisions. This is way companies who want to increase revenue and market share should focus on an efficient and competitive pricing strategy.
Employing data insights is the key to define the most efficient pricing strategy. Using pricing analytics to understand market trends and data will allow your executives to uncover many valuable insights regarding consumer behavior, price elasticity and market dynamics, and therefore make pricing decisions based on data.
- Being able to innovate and adapt
As we’ve already said, today’s retail industry is strongly impacted by the advent of new technologies, able to shift consumer behavior or open up opportunities for brands. Deloitte elected new technologies as being “game changers”, with the possibility to transform entire industries.
The critical question retail analytics consulting faces is which technologies should be implemented and how they can optimize return and efficiency. Keeping pace with new technologies is fundamental but far from simple; here are the most common pitfalls when trying to implement a new technology:
- Lack of expertise
- Short-term mindset
- Lack of training
- Lack of involvement and vision by senior managers
A clever approach to avoid failure while not giving up on the possibilities offered by new technologies is to seek external support from retail analytics consulting experts and cpg data companies like Tredence.
Have a look at Tredence’s success stories in retail analytics consulting.
Retail analytics solutions to lead your company to success
While there isn’t an infallible formula for retail success, focusing on the 7 key factors underlined in this article is a great start to ensure your company is competitive.
These factors collectively contribute to succeeding in the retail industry by fostering customer loyalty, driving sales growth, and ensuring long-term sustainability in a dynamic and ever-changing market. Retail analytics consulting should start from these 7 aspects to uncover areas of improvement or pitfalls and strengthen a business by offering clever retail analytics solutions.
