Retailers are closing their doors at an alarming rate. Competition is fierce, and not all will survive.
Does this mean retail is dead? Of course, not.
Consumers haven’t stopped buying things—they’ve just changed how they make purchases. Today, people aren’t limited to nearby stores. They can hop online to compare prices or look for a more appealing shopping experience.
By harnessing the power of retail analytics, both retailers and consumers will see benefits—a more pleasing experience for shoppers and pumped up sales for retailers.
Today’s Retail Sector Challenges
Our world is fast-paced and immediate results are expected. Consumers enjoy more options than ever. This provides opportunities for retailers—but challenges, as well. To stay competitive, retailers must:
- Provide a top-rate experience: Consumers appreciate the overall shopping experience as much as price, so successful retailers must go the extra mile to build a positive brand image and stand apart from the competition.
- Be aware of cybersecurity risks: An increased reliance on tech brings cybersecurity risks, such as potential breaches and DDoS attacks. Retailers have a responsibility to ensure the security of customers’ personal information—whether it’s credit card data or an email address.
- Keep up with technology: Consumers expect a seamless experience both in-store and online; and 95 percent of millennials want meaningful brand experiences via social medial. Retailers need to ensure that things like inventory, pricing, and customer systems line up with digital expectations.
- Be up-to-date with legal, compliance, and taxation issues: An expanded customer base means being aware of global, state, and local regulations.
Using Data to Drive Success
Smart use of data can enhance customers’ shopping experiences and increase profitability for retailers. Here are five ways retailers can put technology to work:
1. Dynamic Pricing
Dynamic pricing offers flexible prices for products based on real-time market demands, making it easy for consumers to score deals and retailers to unload stock. It has been around for years but has grown in sophistication. Companies now use software with pricing algorithms and demand-tracking sensors to offer the best prices. For example, market behemoth Amazon conducts price changes, on average, every 10 minutes.
2. Big Data
It’s estimated that 86 percent of retail executives plan to increase investment in big data tools. No surprise, since retailers that use big data properly can improve operating margins by more than 60 percent.
3. Location Analytics
Customers who enter a store with their cell phone are treasure troves of information. Stores can harness this data to learn how many people enter their store, how long they stay, and how many times they return. It can also be used to understand purchasing behavior. Savvy stores can even send relevant, geo-targeted push notifications directly to customers’ phones.
Retailers plan on spending $2.5 billion on connected devices by 2020. IoT can be used to engage customers and collect data for retailers, including real-time analysis of supply and demand.
5. Cross-Platform Analytics
Customers increasingly use several digital touch points along their path to make a purchase. They may hear about a product on social media and then hop over to the company’s website to learn more, before heading to a physical store to buy the item. Retailers can use cross-platform analytics to track the customer’s research journey to make it seamless across all channels.
Optimizing the power of big data requires retailers to consider security implications. Xiologix has extensive experience providing smart, secure technology solutions to retailers. Contact us to learn more.