Retailers tap into predictive analytics
As experienced merchants would know, huge consideration is assigned to the supply chain.
Determining whether a certain target audience will purchase more of Item A than Item B necessitates scrutinizing a number of factors, including, but not limited to:
- How in-store traffic is affected by each of the four seasons
- Whether the product in question sold well over the past two years
- Which demographics have historically bought Item B
- If people tend to purchase Item B in bulk or not
A product's success depends on how well it's marketed and how efficiently suppliers produce and deliver it to retailers. If hundreds or even thousands of relationships exist throughout a single company's supply chain, then it must apply predictive analytics to assess risk and determine value.
Viewed as a strategic asset
Accenture Senior Managing Director and IndustryWeek contributor Mark Pearson noted that, out of 1,000 senior executives surveyed by the research company, 97 percent comprehend how data analysis will impact their distribution and procurement considerations. However, only 17 percent of those respondents claimed to have used such tools in regard to separate facets of their supply chains.
One of the ways in which companies are leveraging data analytics has expedited the time it takes for products to be delivered to market. More than half (61 percent) of noted that analysis software allowed them to reduce order-to-delivery cycle times, a huge boon for merchants pressured by omnichannel shopping.
Predicting the future
While the aforementioned capability describes analytics solutions capable of parsing through and presenting raw data in an intelligible manner, how are retailers utilizing predictive programming? Apparel Magazine noted how location-aware beacons and radio-frequency identification technologies are being deployed in brick-and-mortar stores throughout the facility. To get a good idea of how they work, consider the following scenario:
- Emily walks into an apparel store and turns on her smartphone
- A beacon registers the smartphone's Internet Protocol address and follow her movements throughout the outlet
- She stops in front of a particular sweater and gives it a 4-second kino test
- She repeats the same tangible exam with four other sweaters, taking 10 seconds on average to feel them over
While placing the four sweaters she held longer back in the rack, Emily purchases the sweater she felt for four seconds. The retailer identifies that the sweater she purchased was wool, deducing that Emily will most likely purchase wool sweaters in the future.