6 Ways To Leverage Business Intelligence In Brick-And-Mortar Retail

There should be no doubt in our minds that the pandemic has accelerated the shift to eCommerce by five years. As a result, there are roughly 2.14 billion online shoppers as of April 2021, representing a huge jump from 1.32 billion in 2014.

Due to increased online shopping, the sales from departmental stores declined by 25% in the past year, which further grew to a 75% decline in the second quarter of 2020. But despite the considerable growth of eCommerce worldwide, brick-and-mortar retail is not dying.

If we look at the most recent statistics, eCommerce accounts for only 21.8% of global retail sales. However, brick-and-mortar businesses that treat their craft as a dying art certainly cannot survive in the world of rapidly changing consumer behaviors and expectations.

Today’s customers are more price-sensitive, convenience-driven, spoiled for choice, and short on time. These are precisely the traits that eCommerce successfully tapped into.

The competitive game for retail is evolving, and it demands business owners to optimize their offerings, pricing, and promotional strategies to target customers on a personalized level. That is where Business Intelligence (BI) enters the picture.

Defining BI

BI enables businesses to gather accurate, reliable data from diverse sources for valuable decision-making. It is merely a set of processes and technologies which convert the raw data collected into something meaningful. Brick-and-mortar retailers can benefit from BI in six ways:

1. Optimized product placements

Retail store product placement is the process of determining the most appropriate placement for a product in a store to drive more sales and increase profits.

With the help of effective planning and design, brick-and-mortar businesses can identify the “hot spots” for placing the items that sell more. They also need to handle other deciding factors such as the amount of square foot required and optimal lighting to ensure maximum footfall lands on those hot spots.

Gleaning information for perfect product placement can be tedious for retailers if they use only manual methods. However, leveraging BI tools, they can analyze in-store traffic within a specific timeframe, the store size, consumer behavioral patterns, and so on. The outcome helps in products getting more traction as desired.

2. Improved inventory management

While courier mail service is an important ingredient for running a successful eCommerce store, inventory management is critical for brick-and-mortar businesses. It encompasses all the activities — from sourcing and storing to selling products — related to stock handling.

However, manually keeping track of the many items sold in a physical store is a challenge that may result in overstocking or understocking and various warehouse storage issues.

Such pitfalls usually always have an adverse impact on the company’s bottom lines and customer experience.

With the help of BI, products can be easily classified based on ABC analysis — also called “Selective Inventory Control (SIC).” This method helps in stocking items under three categories — A, B, C — with C comprising the least valuable items.

Besides, brick-and-mortar businesses can quickly analyze future over-stock or under-stock situations beforehand, helping them stock products appropriately.

3. Empowered in-store staff members

When we talk about the shopping experience, brick-and-mortar stores are proven to better connect with customers than eCommerce stores simply because face-to-face interaction is possible physically.

According to a 2019 First Insight study, 71% of shoppers spend more than $50 when shopping in-store. This amount can be increased for every physical shop through personalization.

Since BI enables the easy integration of customer histories into CRM and POS apps, brick-and-mortar businesses can capture more data regarding their customers’ behaviors and shopping patterns and empower their floor staff members to capitalize on the retail channel.

4. Enhanced and personalized customer experience

Adding to #3, research has shown that customers are more likely to visit a physical store that offers a personalized shopping experience. They always look for ways to connect closely with brands and to shop from product recommendations.

Thankfully, BI helps improve the experience brick-and-mortar businesses offer to their footfall. By leveraging the technology, retailers can conduct a detailed analysis of customer preferences and previous purchases.

The knowledge equips the floor staff members to give targeted in-store recommendations and on-the-spot and real-time advice on certain products. As a result, ensuring high-touch customer service has become a need rather than an option for impressive retail growth.

5. Boosted conversions from marketing campaigns

All brick-and-mortar stores keep a record of their transactions. This data can be used for executing marketing strategies through agencies or in-house marketers that result in better conversions. That is because BI helps businesses get answers to important questions like:

• Which products sell well?
• What are the customers’ demographics?
• Which months perform exceptionally well?

In addition, BI is not just restricted to using only specific business analytical tools like Zoho Analytics, Sisense, and Microsoft Power BI.

Many digital marketing tools also help fetch information from social media, user forums, and web browsers, among other sources, to help brick-and-mortar businesses predict purchasing trends and optimize in-store marketing activities.

6. Reduced expenses and enhanced efficiencies

BI makes data-driven operations achievable for retailers like never before. For example, deploying the BI technology helps them understand how to manage staff based on the ebb and flow of the physical traffic.

They can thus employ an appropriate number of people to ensure customers in the store get adequate assistance. The analytical approach of BI also enables them to create engaging promotional campaigns for achieving the best possible ROI.

Also, by understanding the customers’ response to the campaigns, allocating resources and marketing funds can be done more tactically by brick-and-mortar businesses.

In conclusion: BI is the way to go!

To survive and thrive in the competitive environment, brick-and-mortar businesses must change how they deliver customer experience. With the help of BI, they have the capability to collect accurate and reliable data and ensure better decision-making for an enhanced in-store experience.

In the future, wearables for the store staff may empower them to interact with nearby potential customers through sensors and beacons. But, whatever tomorrow holds, retailers must embrace a data-driven BI-centric approach to grow a successful business offline.

Guest article written by: Lucy Manole is a creative content writer and strategist at Your Marketing Digest. She specializes in writing about EdTech, productivity, career, technology and entrepreneurship. When she is not writing or editing, she spends time reading books, cooking, and listening to music.