Agile, accurate decision making ability is key to retailers’ success
By Jaco Barnard, Head of Retail at Wipro Ltd, South Africa
Edited by Nye Longman
Today’s retail environment is progressively dynamic; with increased competition, higher customer expectations and a growing number of customer engagement channels, the need for business agility has never been more critical. Hindsight is no longer sufficient, as competitive advantage is driven by those retailers who are able to respond better and faster to the demands of customers and to rapid shifts in the market.
Whilst many retailers have invested in analytics solutions, the perceived challenge of big data means that these tools are not being utilised to their full potential. With data being generated faster than ever before from an increasing number of sources, many of them outside of the traditional structured channels, reactive analytics such as Business Intelligence (BI) and after the fact reporting do not provide the required level of insights.
Successful retailers demonstrate that strategies driven by analytics deliver strong and measurable results. However the point to be noted is that while technology is essential for tapping into big data to generate valuable insights, it alone is not sufficient. Truly leveraging predictive capability requires a shift in mind-set and the integration of analytics-based processes and culture throughout the enterprise.
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Predictive analytics delivers insights that would not otherwise be available to retailers, enabling them to act on accurate information with enhanced decision-making ability. It allows companies to extract historical information and identify patterns based on an action taken or event that has occurred. This information can then be used as a benchmark for future decisions; an analytics driven environment can aid retailers in maintaining and driving customer relationships.
Such insights can be used to develop changes in the business strategy leading to dramatic improvements and profitability. This includes a number of operational benefits, like improved margins, enhanced levels of customer satisfaction, and increased market share. In addition, predictive analytics offers a number of tactical advantages, such as improved planning accuracy, higher customer retention and enhanced conversion to sales for advertising and promotional spend.
In a data intensive retail market, insight is the singular driver of competitive advantage and analytics is integral in delivering this insight. Without the ability to make accurate forecasts and enable agile decision-making, retailers will not be able to serve/satisfy the evolving consumer demands, and will eventually lose out to the competition that is able to do so. Retailers that are empowered to leverage and embrace the power of predictive analytics and big data to gain insights, will be well prepared to deal with the challenges of a dynamic business environment.