The retail sector is on the cusp of radical transformation and analytics is the engine for change. Analytics has become the differentiator in a sector that was badly hit by the recession. If there is no intelligent analytics coming out of the data that is collected, there is no way that management can make informed decisions. There are hundred of thousands of “data points” in retail, more than any other sector because of the nature of the business. These data points are stock keeping units, each one accounted for on the overall merchandising plan, being able to identify fast moving items is the key to profitability.
I suppose a store is like a monopoly board where Shrewsbury and Aylesbury road are the most visited aisles and Crumlin gets less footfall. You need to put the highest margin best sellers at the biggest traffic points. While retailers will have a good grasp of what is hot and not in their product lines, the devil really is in the detail. TRC solutions who deliver point- of- sale and business management software to retail say that understanding the sales performance of the middle 65-70 per cent of units is the hard part and that’s where analytics make the difference. It’s about informing decisions for an attrition programme to drum out non- performers or add new merchandise.
Another huge area of retail that benefits from better visibility is discounts, marking down the right items at the right time to ensure a timely turnover of stock. Without analytics around the mark down and sales, a fashion retailer, for example, risks ending up with out- of- season stock they couldn’t give away. According to Gavin Peacock who is CEO of TRC solutions, tier one retailers appear to be constantly having sales, because they have identified what isn’t moving and likely to cause a block if it isn’t sold off to make way for the next range. The profitable retailers buy properly and smartly in cycles, they wouldn’t have a clue how to do it without analytics.
TRC with over 20 years of experience provides a range of products such as Tableau and Qlik, as well as more specialised retail applications. A natural consequence of stores generating more raw data- through electronic point of sale systems and accounting packages- is growing interest in analytics. The recession also played a massive part, from 2008-2012 all but the most disciplined retailers were in survival mode and they were under pressure to become more efficient. A number of banks called on their retail clients to use analytics as a condition for survival, why you might ask?, well reduced footfall, tighter margins and the decline in the average consumer spending have encouraged them to drill down into data to find ways to do more with less. Now with signs of recovery, analytics promises to take retail to a whole other level.
TRC solutions is launching a product very soon that plugs in to an always- on RFID(radio frequency ID) device which will be capable of reading 5000 items, 100 times a minute and streaming the data to the cloud to be analysed. It is amazing to think you can tell how many times an item is picked up before it is bought or how many times a garment is tried on before it is purchased, and how quickly staff get items back on the racks. We really do live in a world were flat, obsolete and out-of-date reporting has gone. The new way is about having trigger points for real intelligence built in across the entire enterprise.