Benefits of BI in Retail: Increase Sales, Improve Efficiency, and Reduce Costs

Overview of BI in Retail Industry

The global retail market size reached over USD 23 trillion in 2020 and is anticipated to increase at a healthy rate between 2023 and 2028. As one of the most data-driven businesses, retail companies are increasingly turning to Business Intelligence to capitalize on possibilities. Business intelligence (BI) technologies assist retailers in organizing, analyzing, and contextualizing business data. And with reports, performance metrics, and corporate trends, it allows for informed decision making in the present. In addition, BI enables retailers to estimate sales, assess market potential, and get a greater understanding of consumers.

Benefits of BI in Retail

Business Intelligence allows organizations to grasp large amount of data about sales to market trends, customer behavior & needs, and more. The data analyzed with the help of BI tools helps businesses to connect with its customers.

Here are the few key benefits of business intelligence in the retail industry:

• In-depth comprehension of patron’s behavior: Customer satisfaction is the cornerstone to every business's success. It offers value to the company, aids in customer retention, minimizes staff turnover, and enhances brand loyalty. Business Intelligence can assist merchants in identifying their customer, desires, and behaviors. This data may be used to enhance customer service and create more successful marketing initiatives.

• Enhanced Inventory Management: Inventory control is the foundation of every successful retail operation. It includes the procurement, storage, and sale of raw materials and completed commodities. Any retail organization with inventory has a number of inventory challenges. From ineffective monitoring to overstocking challenges, inventory management can be challenging for merchants. BI and data analytics solution, however, can aid in inventory management and eliminate the majority of stock-related issues shops experience.

• Store Floor Plan Optimization: One of the primary reasons retailers use BI is to create a floor layout that would entice customers to spend significant time shopping. Businesses should choose a layout that enables clients to shop without hassle. With the aid of business intelligence tools, they may examine many data sets such as the number of stops, the length of each visit, and the items purchased and propose a layout that will make it easier for customers to locate what they're looking for.

• Improved Merchandising: Merchandising is the most crucial aspect of a retailer's operation and one in which merchants are starting to fully harness the advantages of business intelligence. The initial distribution of products across channels and outlets is more precise when the analysis of previous success is paired with plans and estimates of future consumer behavior. Based on client demand patterns, assortment and size optimization ensures that the relevant assortments, sizes, and case-pack distributions are provided to the correct retailers. Pre-season and in-season pricing, promotion, and markdown optimization ensures that goods are priced for maximum profitability.

• Efficacious marketing: With the proliferation of social media tools and marketing platforms, the marketing business has become more data-driven. To get the greatest results from a marketing plan, however, firms must have a system in place that can give relevant insights and evaluate data on the purchasing behavior of customers. Consequently, BI tools come into play. They increase the effectiveness of a company's marketing initiatives.

Case Study based on the effects of BI in Retail Industries

One of the biggest suppliers of electronic appliances in West Africa. With over 15 years in the consumer electronics sector, it is geared towards bringing the latest technology to your doorsteps, bringing happiness into the lives of individuals, homes, offices, and the hospitality sector in West Africa. The company was using the traditional ERP system till 2019. The company implemented ebizframeBI in 2020, which changed its business model. The business transformation towards better performance. Although revenue fell in Apr-20 rest of the months, have performed much better than the previous year.

Similarly, with continuous use of BI and having benefited from it, they further capitalized on the tool's capabilities and decided to completely automate management MIS.

Benefits of BI in Retail