Advantages of BI in the Retail Sector

by Tech Geekk writer

Business intelligence is a term used to describe the technology that enables data preparation, mining, management and visualization. The tools and processes of business intelligence allow the users to pick out actionable information from raw data, enabling companies to make decisions based on data insights.

In the retail industry, the use of business intelligence can assist in making informed decisions concerning inventory, pricing, marketing, purchase etc. The retail industry today is highly competitive and the flow of information like supplier data, buying behavior of customers, employee information, inventory, etc offers opportunities to be more efficient and successful.

What is retail business intelligence? Technology-driven processes and data analytics can convert raw data streams into insights that can enable and support better decision-making. Analytics can be used to identify trends and patterns in many ways.

Some of the tools and solutions that can be used with BI-

Dashboards and visualization- A dashboard is a data visualization tool that can help in tracking, analyzing, and displaying KPIs, metrics, and other critical data points on screen for easier understanding and interpretation of raw data.
Data mining- Data mining is the process of sorting through voluminous data sets to identify patterns and relationships that can help find solutions through data analysis. Data mining techniques and tools can help organizations to predict future trends to make better-informed decisions.
Predictive analytics- As the name suggests, predictive analytics makes predictions about future outcomes by using historical data combined with statistical modeling, data mining and machine learning. This tool is used to identify opportunities and risks in business.
Prescriptive analytics- By analyzing data and using all possible permutations, combinations and all relevant factors, determines and yields the optimal course of action and is a valuable tool for data-driven decision making.
Text analytics- This method of analytics translates volumes of unstructured text data into quantitative data output and helps uncover insights, trends and patterns from it.

BI can track customer interaction with the online stores, and this information can be used to give the customers a better shopping experience.

BI can help retailers make smart and efficient decisions based on customer behavior. Analytics can help decipher the data in real-time, allowing businesses to make necessary changes in product offers.

Benefits of Business Intelligence in the Retail Industry:

Customer behavior- Using business intelligence, retailers can identify their customers, their buying behavior and their purchase preferences. This information can be used to use better marketing initiatives and enhance the customer experience. Analytics can help retailers to create data-driven customer usage maps to provide insights about their interaction with the products, retail websites, or the business.

Floor plans- BI software can create floor plans that can help retailers place products in a way that has better visibility and also helps customers shop comfortably and with ease.

Inventory management- Inventory management is essential for any retail business, starting from sourcing, storing, purchase returns, sales and sales returns. It's a challenging task and mismanagement can create havoc in sales and finances. By investing in BI, retailers can simplify inventory management and resolve any stock-related challenges. BI can help in maintaining the stock at optimal levels, reduction in surplus inventory, reduction in inventory costs and also improving order management and processing.

Supply chain- With retailers engaging with vendors across multiple geographical locations, supply chain management becomes very critical. supply chain and inventory management are intertwined. Any lapse in supply chain management can lead to inventory management problems, from insufficient stock to excess stock of certain goods. Business intelligence can be very helpful in this area by giving real-time updates on day-to-day operations and material delivery across various merchants. This helps identify supply chain bottlenecks that can be addressed immediately.

There are many BI tools available in the market today and we look at a couple of more popular ones:

Microsoft Power BI- This tool offers interactive business intelligence capabilities offering intuitive visualization capabilities for creating dashboards and smart reports. It has built-in AI capabilities and pre-built data connectors and offers easy integration into other Microsoft resources like MS Azure, and Microsoft 365 provides end-to-end encryption and real-time monitoring.

Tableau- This analytics tool provides dashboard development to merge and integrate data onto a single platform. Doing so provides actionable insights for decision-making. It supports visual query language and an intuitive interface making data exploration easy. It can also combine raw, relational and semi-structured data in real-time.

Conclusion: With increasing competition and varied markets, the importance of business intelligence and the advantages it offers to the retail industry are endless. It can enable and enhance a business's smart decision-making capabilities with real-time information. Partnering with an experienced team of professionals can help overcome difficulties in selecting the right BI tools and assist in developing a BI solution.