THE COMPLETE

GU IDE TO

RETA I L

ANALYT I C S

www.quantz ig .com February 2019

ABOUT QUANTZIG

For more than 15 years, we have assisted our

clients across the globe with end-to-end data

management and analytics services to leverage

their data for prudent decision making. Our firm

has worked with 120+ clients, including 55+

Fortune 500 companies.

At Quantzig, we firmly believe that the

capabilities to harness maximum insights from

the influx of continuous information around us is

what will drive any organization’s competitive

readiness and success. Our objective is to bring

together the best combination of analysts and

consultants to complement our clients with a

shared need to discover and build those

capabilities and drive continuous business

excellence.

WE 'RE A

PASSIONATE

ANALYTICS

SOLUTION

PROVIDER FILLED

WITH ZEALOUS

INDIVIDUALS

THE OPPORTUNITY THE CHALLENGE

CONCLUSION

APPLICATIONS OF RETAIL ANALYTICS

Store Layout Planning

Inventory Optimization

Sales Forecasting

Customer Intelligence

Market Basket Analysis

Price Optimization

T A B L E O F C O N T E N T S

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INTRODUCTION

I n t r o d u c t i o n

Most bus inesses ac ross i ndus t r i es have rea l i zed the power o f ana ly t i cs and a re l eve rag ing ana ly t i cs ac ross eve ry aspec t t o op t im ize the i r bus iness p rocesses . The uncer ta in economic l andscape , sh i f t i ng cus tomer p re fe rences , and na r row marg ins a re a l l ma jo r fac to rs tha t a re push ing re ta i l e rs to f i nd e f fec t i ve ways to re ta in cus tomers and improve bo t tom- l i ne resu l t s . However , seve ra l re ta i l e rs a re m iss ing ou t on bus iness -c r i t i ca l i ns igh ts to d r i ve g rowth and p ro f i t ab i l i t y s imp ly because they have chosen the wrong approach to ana ly t i cs o r a re unaware o f i t s bene f i t s . Th is a r t i c le w i l l add ress j us t t ha t , i n an env i ronment tha t has never been so comp lex and as mass ive l y ove r loaded w i th i n fo rmat ion as i t i s t oday - ‘The Reta i l Sector ’ . I t a l so addresses the con tex t o f ana ly t i cs i n today ’s re ta i l scenar io and l i s t s ou t t he app l i ca t i on a reas where re ta i l ana ly t i cs can he lp add va lue to you r bus iness .

T h e O p p o r t u n i ty

Reta i l ana ly t i cs o f fe rs seve ra l new oppor tun i t i es to d r i ve bus iness g rowth . By engag ing w i th the r i gh t re ta i l ana ly t i cs se rv i ce p rov ide rs and leve rag ing the r i gh t re ta i l ana ly t i cs too l s , re ta i l e rs can ga in i n -dep th i ns igh ts on : • O f fe r ing ta rge ted p romot ions based on cus tomer buy ing pa t te rns and p re fe rences • De l i ve r ing the r i gh t se rv i ces and marke t ing messages tha t i ns tan t l y s t r i ke a cho rd w i th cus tomers • Reac t ing to sh i f t s i n demand and supp ly d i s rup t ions • Op t im iz ing inven to ry and ensur ing on -she l f ava i l ab i l i t y o f p roduc ts The adopt ion o f re ta i l ana ly t ics is growing rap id ly , as lead ing p layers in th is sector have rea l i zed s ign i f icant re turns through the use o f ana ly t ics p la t forms and serv ices . Wonder what would be the r ight re ta i l ana ly t ics approach to use to ga in ex t reme ins ights?

T h e C h a l l e n g e

Though re ta i l e rs possess huge vo lumes o f da ta , many lack the ab i l i t y t o ex t rac t i ns igh ts f rom such comprehens ive da tase ts . The lack o f know ledge and too ls to ana lyze uns t ruc tu red da tase ts fo rms a ma jo r roadb lock fo r re ta i l e rs i n today ’s da ta - in tens ive wor ld . W i th the g row ing economic uncer ta in t y and dec reas ing marg ins , re ta i l e rs a re keen on bu i l d ing the requ i red ana ly t i cs capab i l i t i es by l eve rag ing the power o f re ta i l ana ly t i cs . One o f t he ma jo r cha l l enges tha t re ta i l e rs face when i t comes to i nco rpo ra t i ng re ta i l ana ly t i cs i n to the i r bus iness p rocesses i s know ing how to ge t s ta r ted . They o f ten do no t know exac t l y wha t da ta to co l l ec t , how to ana lyze i t and ex t rac t i ns igh ts tha t w i l l he lp d r i ve p ro f i t ab i l i t y . On the o the r hand , i t i s no sec re t t ha t re ta i l e rs co l l ec t eno rmous amoun ts o f da ta eve ry day . I t i nc ludes sa les da ta , da ta ob ta ined f rom loya l t y p rog rams , and so on . And fo r bas i c ana lys i s , t h i s i s o f ten more than enough . Bu t when the ob jec t i ves o f t he bus iness a re to ga in more spec tacu la r i ns igh ts tha t rea l l y make a d i f f e rence , o the r da ta sou rces need to be taken in to cons ide ra t i on .

Ap p l i c a t i o n s o f R e t a i l

ANAL Y T I C S

Lead ing re ta i l i ndus t ry p laye rs have app l i ed re ta i l ana ly t i cs to va r ious bus iness func t ions to ga in enormous success . The fo l l ow ing in fog raph ic h igh l i gh ts va r ious a reas where re ta i l ana ly t i cs can add va lue to a re ta i l e r :

Store Layout P lann ing S to re l ayou t p lann ing i s o f key impor tance fo r boos t ing sa les and improv ing cus tomer sa t i s fac t i on . I t i nvo lves de te rm in ing the op t ima l s i ze o f each re ta i l depar tmen t w i th an ob jec t i ve o f i nc reas ing cus tomer foo t fa l l and sa les . Bu t to do so re ta i l e rs w i l l have to l eve rage ana ly t i cs to answer seve ra l ques t ions such as : • How cus tomers nav iga te the s to re • Wh ich depar tmen t a t t rac t max imum cus tomers? • How shou ld the p roduc ts be d i sp layed? Inventory Opt imiza t ion Re ta i l ana ly t i cs can s ign i f i can t l y improve inven to ry management th rough inven to ry rep len ishments , l oca t ion op t im iza t ion , and a reduc t ion i n t ranspor ta t i on expenses . Re ta i l e rs a re now push ing the l im i t s by emp loy ing soph is t i ca ted ana ly t i cs too l s to p red ic t s demand-supp ly f l uc tua t ions , i den t i f y s tock -ou t cond i t i ons , and improve supp ly cha in e f f i c i ency .

Sales Forecast ing The ab i l i t y o f a re ta i l cha in to accu ra te l y fo recas t sa les i s o f key impor tance fo r op t im iz ing the i r bus iness dec is ions . Sa les fo recas t ing can he lp re ta i l e rs op t im ize the i r i nven to ry , deve lop be t te r p r i c ing s t ra teg ies , m in im ize ou t -o f - s tock s i t ua t i ons , and o f fe r be t te r se rv i ces to ca te r to the dynamic needs o f t he i r cus tomers . Customer In te l l igence Re ta i l e rs possess huge vo lumes o f cus tomer da ta co l l ec ted th rough severa l p la t fo rms inc lud ing - soc ia l med ia , cus tomer su rveys , and pu rchase h i s to r ies . However , seve ra l re ta i l e rs l ack the bas ic ab i l i t y t o d raw ins igh ts f rom such da tase ts to o f fe r cus tomized shopp ing exper iences to the i r cus tomers . W i th re ta i l ana ly t i cs , one can no t on ly ana lyze cus tomer da ta bu t a l so u t i l i ze i t t o ta rge t cus tomers w i th ta i l o red o f fe r i ngs to su i t t he i r needs .

Market Basket Ana lys is Marke t baske t ana lys i s o f fe rs de ta i l ed i ns igh ts i n to the pu rchas ing behav io r o f cus tomers . Th is o f fe rs de ta i l ed i ns igh ts on p roduc ts be ing pu rchased a long w i th the t rade-o f f s i n the i r cus tomers pu rchas ing dec is ions . Re ta i l e rs can bene f i t s f rom marke t baske t ana lys i s i n many ways : • Improves p roduc t p lacement and inc reases c ross -se l l i ng oppor tun i t i es • I nc reases s i ze and va lue o f baske ts • Be t te r t a rge t ing th rough cus tomized o f fe rs Pr ice Opt imiza t ion Pr i ce op t im iza t ion i s cons ide red to be the shor tes t rou te be tween inc reased sa les marg ins and ana ly t i cs . A comb ina t ion o f ana ly t i cs too l s and p r i c ing s t ra teg ies can he lp re ta i l e rs to l eve rage sa les da ta and t ransac t iona l da ta to i den t i f y p r i ce e las t i c i t y o f t he i r p roduc ts and the i r ana lyze the i r op t ima l p r i ce po in ts . I t a l so he lps them: • Fo recas t and gauge the impac t o f t he change in p r i ce • Make e f fec t i ve p r i c ing dec is ions • I den t i f y base l i ne p r i ce po in ts and markdown p r i ces

C o n c l u s i o n  

The wor ld o f re ta i l i s f as t - t rans fo rm ing w i th the deve lopment o f new bus iness mode ls and p r i c ing s t ra teg ies to su i t t he needs o f a demand ing cus tomer base . Today re ta i l cha ins o f a l l s i zes a re i nco rpo ra t i ng re ta i l ana ly t i cs i n to the i r co re bus iness func t i ons . Re ta i l ana ly t i cs can he lp you un rave l i n -dep th i ns igh ts h idden in the wea l th o f da ta tha t i s ava i l ab le today . Wh i le dec id ing to i nves t i n re ta i l ana ly t i cs , i t i s impor tan t to unders tand the scope fo r i t s app l i ca t i on and wha t each techn ique can he lp you ach ieve in the l ong - run .

WE 'RE A

PASSIONATE

ANALYTICS

SOLUTION

PROVIDER FILLED

WITH ZEALOUS

INDIVIDUALS

G o t a ny

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