South African retail is a competitive space, with tight margins, customers demanding great prices and more personalised offerings, and consumer spending under significant pressure. Big data analytics can be an invaluable tool for retailers seeking a competitive advantage in a complex and volatile operating environment.
That’s the word from Steven Heilbron, CEO of Capital Connect, a fintech that offers hassle-free and flexible opportunity capital to South African retailers in 24 hours. He says that advanced analytics tools can help a retail business to make faster and better operational and strategic decisions, based on real-time insight into the latest trends in their business, customer base and wider market.
Advanced analytics is all about using complex algorithms, statistical models, and other tools to extract insights from data. This set of tools can be put to work to analyse customer data, point of sale data, inventory data, and ecommerce platform data, and then use it to fuel automated business processes as well as to make smarter business decisions.
Says Heilbron: “The data retailers collect through digital marketing, loyalty programmes, point of sales transactions and integration with supply chain partners is a treasure trove. Analytics tools enable a retailer to sift through logistics, inventory and sales data for nuggets of insight they can use to take actions to outsmart their competitors.
“They can use this data to forecast customer demand, sharpen inventory planning, optimise pricing strategies, or refine operational planning in areas such as logistics. The retailer could, for example, use opportunity capital to bulk-buy inventory when there’s an opportunity to stock up on a product before a seasonal surge in demand.”
Get an edge with data-driven insights and opportunity capital
Another key benefit of advanced analytics lies in the ability to personalise the customer experience. Retailers can use data to create a personalised shopping experience for each customer, tailoring product recommendations, offers and marketing messages to individual preferences and needs. This can help retailers increase sales, up-sell, improve customer satisfaction and build customer loyalty.
Consider the example of a liquor store that has put an interactive display in its store. Customers can use the screen to get recommendations for beverages such as wines that are matched to the meal they are preparing, their mood and their tastes. Such a solution can be implemented quickly with access to opportunity capital.
The potential of data and analytics becomes even more exciting when matched with emerging artificial intelligence (AI) and machine learning technology. Predictive analytics uses AI to analyse historical data and identify patterns that can be used to make predictions about future events, such as customer behaviour or market trends.
A retailer’s website might show an increase in searches for products such as vegan food lines or CBD oil. Equipped with this insight, the retailer can move fast to expand its product range and promote its new offerings to potential customers. It can then track how popular these products are in real time as well as assess how profitable they are to sell.
The bottom-line benefits can be significant. According to Google, shoppers who thought retailers provided highly personalised experiences rated them 20% higher on net promoter score (NPS). McKinsey meanwhile estimates that implementing advanced analytics could add 2% to grocers’ earnings—a real win for a low-margin business.
Seize every advantage
The landscape is forever changing and retailers need every advantage they can get during a time of slow growth, shifting consumer buying behaviours, and fierce competition. Data analytics will help to spot new opportunities as they emerge, so that retailers can personalise customer experiences as well as improve efficiencies.
Says Heilbron: “With data analytics, you can see what your customers are looking for, what your competitors are up to, and what’s happening in your supply chain. This helps you make decisions about purchasing stock, diversifying your retail business or adjusting your marketing strategy. Quick access to opportunity capital can help you to take advantage of the new possibilities, so you can beat the competition and maximise your profits. With Capital Connect, you can apply for unsecured business funding of up to R5 million from our app and the funds will be in your bank account within 24 hours, so you never miss an opportunity.”