Brick and mortar retail has been the norm for a very long time now. But since the appearance of e-commerce and its increasing growth, many people feel the good old brick and mortar store will soon be replaced.
Although this is generally considered a misconception, the idea that this is possible can easily be understood. For example, millennials and generation X prefer to do most of their shopping online, and these statistics show that the popularity of E-commerce looks promising.
So what does all of this mean, especially for retail merchandising analytics? According to Forbes, the biggest 18 e-commerce corporations collectively account for about $1 trillion per year. With the worldwide sales expected to reach about $6 trillion by 2023, there is no doubt why more companies want to go online.
Online retailing is promising, however, it is a very competitive sphere. Thanks to high demand from consumers, new trends usually spring up and cut product life cycles. The only way to stay ahead is by investing in analytics and digital to ensure you have the right tools to get consumers coming back to your business. In this post, we will look at how important these two factors are for your e-commerce business.
Merchandising Analytics in Today’s Retail Industry
Before we get into more detail about the impact of inventory and merchandising analytics, we need to answer a simple question: “What is merchandising analytics?”
By definition, this refers to any process undertaken in order to provide analytical data. It not only covers the provision of data but its analysis as well.
In order to be successful in e-commerce, you have to understand that merchandising analytics and other tools used to predict future business trends are important. They make it possible for you to plan your sales for every business period, identify what you will need to make those sales possible (especially by looking at consumer demand), and find the best ways to the advantage of as many business sectors you are interested in. At the end of the day, the main goal of advanced merchandising analytics is to reduce the risk of any financial loss.
6 Examples of How Advanced Merchandising Analytics and Digital Will Drive Retail
1. New Ways of How Merchants Will Work
The functions of merchants will shift as they will take a crucial role in the retail industry. Digital technology will be the main backbone of how merchants handle their responsibilities. Many retailers are already undergoing this transformation.
For example, instead of spending countless hours developing a plan, a merchant can simply utilize predictive analytics, which is more accurate. With automation, retailers will also gain insights more easily. However, it still rests upon them to decide the insights to pursue. This will ultimately be a factor in realizing success.
2. Omnichannel Approach and Experience
The best way to attract customers is to put them at the center. Retailers need to use an omnichannel approach especially as a resolve to attract customers across the globe. The goal will be to ensure seamless cooperation between various business units so that customers have the best shopping experience. Consistency in channels is expected. However, having some variability is equally important.
There are so many ways of implementing the most efficient structure for your retail business. Some approaches that merchandisers are using to set up an omnichannel experience include:
- Stand-alone e-commerce units — this is simply an open-source application that needs web hosting to function. Apart from installing a web host, you will also need WordPress. An advantage of this approach is that you can make changes that will suit your business.
- Semi-integrated e-commerce — there is coordination between a company’s website, accounting, and inventory system. This integration allows for information to flow hastily. Inventory levels will be automatically updated once sales are made on a company’s website.
- Fully integrated e-commerce — in fully integrated e-commerce, inventory, and pricing information in real-time is available for both customers and staff. So if any demand increases, staff members will be prepared.
Larger retailer companies are able to operate at the level of fully integrated e-commerce. However, they still rely on various digital products such as websites and apps. Visual merchandising is among the digital solutions that merchandisers are using. This allows them to provide some sort of consistency in their brands across all channels.
3. Solving Tasks With Complex Systems and Tools
Old tools are bound to become obsolete in usage as more and more tasks of merchants become more complex. Therefore, new sophisticated solutions have to be applied in order to streamline the ability to develop insights. These insights will allow retail companies to focus on the most important priorities. Examples of tasks that require automated complex systems include:
- An assortment of data;
- Product design and development;
- Space planning;
- Pricing and promotions;
- Supplier management;
- Inventory optimization.
4. Tech Improvements and New Approaches for Proper Future Merchandising Work
It is clear that technology has been the core of the biggest changes and has affected retail. As demanding customers constantly look for tech improvements and new trends, lead retail players have to find ways to become more flexible and digitally empowered in advanced analytics and merchandising work. Therefore, organizations need to be ready to start investing in the following capabilities that empower merchants to deliver their best:
System architecture capabilities
So as merchants are managing a complicated set of tasks, automated and effective systems are becoming significant in work. For example, a modular system architecture is composed of small but autonomous routines that work together. With this model, merchants will be able to deal with several responsibilities in a smaller time frame.
A retailer will require frequent software upgrades to keep up with the constant changes in digital technology. Growing data-management capabilities will help process large amounts of data and provide accurate reports. Data management can be used as a key performance indicator and as a way of tracking data quality.
These will allow merchants to make automated predictions based on changes in the market, finances and customer behavior. Automated analytics will thus lead to faster and more accurate decision-making.
These allow retailers to have constant reports on the merchant’s activities and experience. Consistent reports on merchants’ experience are made possible by management tools as well as automated robotics processes.
5. Culture & Performance-Management System
Retail companies need to be prepared to handle any change. This also means using more advanced technology. Adopting a culture and the performance-management system can help. Key elements that will enable success include:
- Talent management;
- Adopting a digital culture;
- Building on external networks;
- Steer KPIs;
- Performance management.
Emphasis should be placed on attracting strategists who are highly skilled in digital analytics. But it doesn’t end there. It is equally important to retain highly talented employees. Retailers should also develop an effective performance management strategy that has a clearly defined path and awards for employees. This promotes development among the best performers.
6. Managing the Transformation
Retailers should see the digital transformation of a company as a way to remain successful and competitive. Adopting it means that a retailer will have to use IT-based solutions to suit the ever-changing needs of merchants. Digital solutions have to be created to suit the specific needs of an enterprise. And each retailer should answer the following to make sure they take the right approach:
- Available technology resources;
- The problems that need to be addressed;
- The timeline of expected success.
Our Experience With Advanced Merchandising Analytics
Our company provides web-based solutions for all kinds of businesses from retail to entertainment. We have a team of highly skilled professionals who are passionate about creating software and digital technologies that will usher your company into the modern era. With us, you will have several complex automated systems that will keep your retail business at the forefront of digitalization.
Technology will have a significant impact on how merchants scale through highly digital culture. The next-generation merchants are expected to focus on scaling strategic issues within an enterprise. This will push retailers to use of digital technology.
This paves the way for higher efficiency and better results within an enterprise. Many manual processes will require automation. Machine learning will guide merchants to focus on the most crucial strategies and make accurate data-driven decisions. Smart solutions will provide real-time insights that will further enhance decision-making.
Retailers can use bvblogic consulting services to make sure they have all the digital technology that will enhance the performance of the next-generation merchants.