With the holiday season in full swing, most retailers probably think it’s too late to make adjustments to marketing, promotions, inventory and distribution to maximize shopping season success. After all, holiday plans have been in place since August. And, based on their supposed sophisticated data analysis, most retailers are confident they already know which toys, gadgets, clothing and colors will be “hot” this year. But do they?
The problem is that consumer tastes and trends change far quicker than five-month intervals. All it takes is a single tweet or posting by an influential trendsetter or blogger and the entire season’s forecasts, plans and promotions could be irrelevant, sending retailers into a scramble to get products to the right outlets and into consumers’ hands. As alluring as BI visualizations can be, the reality is that trends don’t start with a dashboard; they start with people, and they can turn on a dime.
To truly increase revenue, mitigate inventory risks, manage costs, and better engage with customers over the final sprint to finish the fiscal year in the black, retailers need real-time analytics that can give them the up-to-the-minute data they need to make instant adjustments to business strategy. But, conventional BI analytics fall far short in delivering this on-demand insight, taking weeks or months of investigation and trial and error. Analysts must spend a tremendous amount of time formulating and asking questions of the data and hoping the answers they get are accurate and reliable — to say nothing of whether they’ve asked the right questions in the first place.
Fortunately, a new approach to BI analytics called smart pattern discovery is automating and accelerating the process of BI analytics, making it possible for front-line business users — like merchandisers, inventory managers, distribution teams and marketing — to get real-time insights into what’s happening right now. In this slideshow, BeyondCore CEO and co-founder Arijit Sengupta explores how retailers who are armed with this on-demand data can make split-second adjustments to capture a bigger slice of the holiday spending frenzy and make 2015 their best year ever.
Grab a Bigger Slice of the Holiday with On-Demand Analytics
Click through for more on how retailers can take advantage of smart pattern discovery to more accurately align their marketing efforts with current trends, as identified by BeyondCore CEO and co-founder Arijit Sengupta.
While holiday trends can grow like wildfire, they’re certainly not universal. Unfortunately, conventional BI analytics force retailers to distribute and promote products based on universal presumptions: that the trendiest boots in Boston will also be a hit in San Francisco. Retailers need to know which products will sell best in which locations, but conventional predictive models are extremely limited, only able to analyze a few hundred factors. With the massive amount of consumer data available, it’s simply not acceptable to be “in the ballpark.” You must be in exactly the right position to hit a home run.
Smart pattern discovery tools look at all of the data, ask millions of questions and build hundreds of models to help you spot subtle and specific differences. With the ability to get specific, you can target and deliver products and promotions to exactly the right audience at the right time. So, you can know not only which style of boots will be all the rage this season, but which colors, heel height and design will be the favorite for 18-24 year old women in the Dorchester neighborhood in Boston.
Because conventional presumptive analytic and prediction models take weeks or months to craft and update, most retailers have made distribution, pricing and promotional decisions based on weeks- or months-old data. But, since we know consumer trends are fickle, retailers desperately need more dynamic analytic processes that can give them answers in days or even hours, not weeks or months. Smart pattern discovery surfaces trends as they happen, allowing retailers to react quickly. That means you could watch early morning Cyber Monday sales on the East Coast and start tweaking West Coast promotions accordingly to optimize those sales before Californians even fire up their browsers.
Beautiful graphs and charts can be very striking, drawing sharp attention to variations or commonalities in data. But they can also be misleading. They are slaves to your presumptions, giving you exactly the information you asked for — nothing more or less, right or wrong. As a result, they could be statistically unsound, presenting data that is essentially meaningless, leaving valuable insights hidden and distracting decision-makers with what appear to be startling conclusions that are really unfounded anomalies. For example, in a single graph, it may appear that your Black Friday coupons are performing very well, but the reality is that they’re only doing well in stores that historically have high performance anyway… and only stores in Texas and Louisiana. But those anomalies are extrapolated to the rest of the country when viewed from a single graph. Smart pattern discovery automatically shows you the detail — that coupons are NOT doing well in Bangor, Maine or Lincoln, Nebraska, for example, giving you insight to distinguish anomalies from generalities and react accordingly.
Most retailers tend to focus their promotions and coupons on products that they predict will be the hot selling items, to entice eager shoppers to buy from them instead of the competition. But, as the season gets into full swing, it becomes obvious that these items will practically sell themselves. What about the other products that aren’t selling as well? Smart pattern discovery enables you to give the secondary products some love, too. Rather than sticking to a promotional plan that’s just doing okay, you can run predictive models in minutes, look for items that could use a little “propping up” with promotions and run a promotional campaign that rocks, ratcheting up sales on the must-haves and other items, too. This speed allows you to optimize promotions for profitability, even amid dynamic consumer behavior changes.
Remain Agile Despite the Weather
Severe winter weather can wreak havoc on in-store holiday sales. You may have an area that’s crippled by a massive snowstorm, while others remain completely unaffected. With conventional presumptive analytics, inventory and promotions are set in stone and you just have to roll with Mother Nature’s punches. But, with smart pattern discovery, you can see how these events impact in-store sales in real time and still meet the needs of last-minute shoppers. For example, when weather catastrophes strike, retailers can use real-time smart pattern discovery analytics to look at inventory across nearby stores unaffected by the weather and offer free shipping for customers in the affected areas who shop online instead of in-store, and ship that inventory from the stores in the clear. This ability to take immediate action gives you a strong advantage over your competition. After all, you don’t have to fix the weather, you just have to deal with it 1 percent better than your competitors.