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Posted By ECT News Network on 05/09/2019 in Analytics

How Data Analytics Is Redefining the Retail Industry

How Data Analytics Is Redefining the Retail Industry

By Naveen Gattu 

The retail industry has undergone a massive transformation in the past two decades. In the United States, retail sales have averaged 4.38 percent year-over-year, from 1993 until 2019. The transformation from brick-and-mortar stores to online businesses is undoubtedly a vital factor behind this level of growth.

Retailers today produce more data than ever before in the form of customer information, heavy transactions, behavior information, clickthrough rates, supply chain information, and more.

With doubled data volume and velocity, the retail industry is hard-pressed to transform information into actionable insights and reach new heights of sales. A good amount of analysis and statistical modeling followed by influential data storytelling can help retail managers and executives to make quick decisions in real-time.

Understanding the customer better by exploring shopping behavior can help retail chains unearth hidden trends and new opportunities, with the power to escalate the brand to new heights. Data analysis techniques are drilling deep down into customer behavior to uncover valuable insights.

Customer Behavior Analytics

Unlike a decade back, when customers would visit stores in-person to make purchases, new-age customers interact with brands through multiple points such as social media and e-commerce, as well as retail stores.

The trail of data they leave behind captures behaviors such as click-through movements from one product to another, observing an expensive product but bouncing back from the page, or scrutinizing discounted products.

Analyzing such information can enable retail chains to form new strategies to be able to sell more products, attract more customers, motivate people to buy, and conduct targeted selling.

Customer Journey Analytics

What are your customers saying about you?

Gartner terms it a "new kind of analytics." Retailers and e-commerce websites are willing to decode the sentiments of their customers through their feedback. Text analytics is an emerging technology that derives high-quality information and opinions from the unstructured text spread across multiple social media platforms, websites, and feedback and review forms.

For example, a global IT hardware company wanted to analyze the feedback of its customers from heterogeneous sources like social media, feedback forms and survey documents. Their intention was to hear the voice of their customers and serve them better. A deep learning-enabled text mining solution allowed the company to uncover insights from unstructured text and grow its Net Promoter Score* (NPS) by 6 percent.

Augmented Retail Analytics

To analyze the voluminous data, the machine's computing power, statistical power, and processing power need a boost. Convergence of human intelligence and artificial intelligence will optimize the retail industry's business processes.

Amazon was one of the first to exploit the potential of AI in the early 2000s, and 35 percent of the company's sales were soon attributed to the AI innovations.

Simplification of the procurement process is one potential area where AI can have a serious impact. It can automate the categorization of a huge quantity of raw material before converting it into the finished product.

For example, a giant retail chain was procuring tons of coconuts to produce coconut oil. Gramener's object detection solutions helped the company to quantify the exact amount of coconuts required to produce a specific quantity of oil.

Supply Chain Planning

The supply chain is a major function of the retail industry. Supply chain analytics helps increase operational efficiency by enabling data-driven decisions at a strategic, tactical and operational level.

It identifies operational bottlenecks in logistics and transportation of products through the supply chain. Patterns such as transit value, product type and transit time can be analyzed to identify potential paths leading to high costs in the supply chain network.

According to IBM, 85 percent of retail industries plan to integrate AI in their supply chain planning.

Conclusion

With digital transformation accelerating at such a rate, business executives are relying increasingly on AI-enabled solutions to mine actionable insights. Investing in advanced analytics opens up opportunities for data-driven business growth.

With AI, modern enterprise leadership teams can increase their capacity to take care of their ever-growing list of responsibilities, from adjusting sales patterns to identifying market shifts, or offering agile services across the supply chain. With the support of advanced analytics solutions, they can optimize processes, establish high risk mitigation, and offer a better customer experience.

About the Author
Naveen Gattu is the COO and co-founder of data science company Gramener.


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