Predictive Analytics – Retail Analytics
Predictive Analytics For SPAR Retailers
Consumers in today’s world have high expectations, and their behavior is unpredictable. Consumers have less money today than before and so promotional items are now becoming more important than ever before to save a buck here and there, It is critical to understand what you customer is looking for when it comes to promotional items. It makes no sense to promote a certain item\items where you would not attract an audience. It is important to use tools such as Retail Promotion Analytics to get a better insight in your retail operations.
Promotional analysis is a technique of evaluating success or failure of a promotion retail data from previous campaigns or your store ‘s data. With this technique you will be able to deduce activity from your sales and marketing strategies. The objective of promotional analysis is to help a retailer understand the impact of past promotions and formulate future strategies which could be applied and adapted to produce profitable results and to increase your customer base and ultimately increase sales..
What a retailer should know before launching a promotion?
With Retail Promotion Analytics, the effectiveness of a promotion offered should be measured in order to get insight to the success of the promotional or given to customers. In order to do so, customer behavior should be analyzed. Retailers often fail to realise that a consumer demographics like age, gender, requirement, and income determine the performance of a particular item on promotion. You would not try sell a very expensive what with a discount attached in a moderately poor area, this just wont work.
Understanding the kind of promotions to be launched plays a key role to retail growth. Revisiting past promotions, retailers should review and analyze the effectiveness of the promotion and how to move forward to improve the quality of your future campaigns
- How frequently should a promotion be launched?
- Which categories respond the most to which promotions?
- What are the key metrics to calculate retail promotion effectiveness?
- What product combinations can be promoted together?
- How is my promotion affecting the basket size?
- To promote the entire category or to concentrate on only key products?
- How does a retail price change in product affect traffic and overall revenue?
- Do price increase/decrease on some items negatively impact sales of other items?
- How to drive new traffic to stores?
- What are the most effective promotions to reach target customers?
- How to optimize my promotions based on any upcoming holidays or major events?
Once a retailer understands the direct-indirect impact of promotions, the following adjustments can be made
- Use different methods of promotions from cash back to discounts and so on…
- Use effective promotions from the right items to the best price. Do combo’s and kit promotions, as single item promotions may not work very well, the two for a certain price save a certain amount is working extremely well in South Africa.
The idea is to provide the right customer with the right promotions
Use Promotion Retail Analytics Data to Improve Forecasting
Forecasting is an important aspect of placing the right sized orders; If you can’t anticipate how much is going to move off the shelf, how can you plan order successfully? Many retail managers do not of real-time and up-to-date insight into their retail promotional activities and land up not getting the most out of retailer promotional campaigns due to bad data or no data available to them.
An example of this a Retail supervisor runs a promotion at one store which was very successful but the same promotion did not do so well. It is important that good analytical research is done on the demographics of that particular store.
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