It’s the information age, do you know what data can do for you? In 2015, information is readily available for businesses and consumers alike. This bestows businesses with a double edged sword. On one hand, their stores are easily found, but on the other it’s easy to find competitors as well. This makes comparison shopping a staple in most consumers’ buying process, so how can retailers keep up? Two words: business intelligence.
How Business Intelligence Benefits Retailers
Beyond sounding cool, business intelligence is becoming crucial for retailers to include in their arsenal of strategies, from pricing to inventory. With more and more customers flocking to the internet as their ideal shopping destination, now is the time to improve visibility and offer the right product at the right time at the right price.
Business intelligence removes the sense of gambling from your business decisions. Instead of guessing what customers want or guessing where to position your pricing, retailers can now use concrete data to fuel their business strategies. Instead of speculating, you can now use competitor data to piece together the right price and assortment for your products.
Business intelligence also ensures that you’re accommodating your customers in the best way possible. The age-old saying “the customer doesn’t really know what they want” is still true in 2015. Instead of customers telling you what they want, business intelligence can show you what they want.
But what kind of business intelligence should retailers look into to get ahead of their competitors? Here are a few:
Understand Your Customers’ Navigation
The first kind of business intelligence that retailers should look into is testing with heatmaps. Performing A/B tests on your website can remove any uncertainty about your web layout from your mind. By having customers use two different layouts, you can be certain which one works best to boost conversions.
Whether it’s a different colored button or different placement of call to actions, A/B tests can help you establish a stronger layout for your customers. A clean layout throughout the buying process can make a world of a difference for customers, and will ultimately improve your conversion rate. But how can you tell what the customer is clicking?
A heatmap can show you where the customer clicks and runs their cursor over most frequently. Combining a heatmap with your A/B tests can show you different areas of your layout that need work. For example: if you notice significantly more clicks on a button in one test than the other, you know that version is probably the way to go. By adding tests and heatmaps to your business intelligence, you can optimize your site for increased conversions.
The information age has intensified competition, but has also provided retailers with more effective and efficient ways to optimize their webstores for their shoppers. Hard data removes guesswork and allows you to streamline your processes online. Testing can help you easily identify a more optimized version by testing.
Mine for Gold
Data mining is a crucial way for retailers to gain business intelligence this day in age. Whether it’s data regarding competitors or customers, grabbing raw data and having it analyzed can aid in optimizing prices and the overall customer experience on a retailer’s site.
Two examples of important data to collect and analyze are cart contents and cart abandonment rates. If a customer has an account on your site, you can connect the shopper’s cart contents to their name and personalize the entire shopping experience. You can also use that personalization as a means to encourage and promote memberships instead of guest checkouts. If a customer visits your site but abandons their cart, use their data to issue retargeting ads. Approximately 26% of consumers will return to checkout after being retargeted with ads. You can also include “similar items” on the sidebar based on their previous purchase behaviors or cart contents.
Customer data can also help you send offers based on previous purchases. According to a RetailMeNot survey, 64% of customers want more discounts this year. Go ahead and email them with discounts and limited time flash sales. Or if they purchase an item whose price has gone down in the past ten days, give them a credit worth the difference between the prices. They’ll appreciate the gesture, and it will get them to return to your store.
See the Future
Predictive analytics can use data from the past to plan ahead. Gathering data can help you seasonally forecast sales down to the hour. This can help you stock up on inventory by showing you what items sold well at what time. It can also help you determine optimal price points for your products throughout the day.
If you take an hourly snapshot of your sales from previous days, you can get an idea of what sells well at certain times. Let’s say this past week you noticed blue, green, and red shirts selling abnormally more than usual, and you eventually ran out. Coincidence? Not really, since the Super Bowl featuring The Seahawks and The Patriots was last weekend. You can use this knowledge to stock up on shirt colors that correspond to the appropriate teams for next year’s Super Bowl.
Using predictive analytics can also help you price effectively. Purchase patterns fluctuate throughout the day, and historical data can help you spot these changes. With this information, you can determine prices based on apparent demand. Not a lot of people buying a product? Lower the price. Everyone looking at a product? Increase the price. A dynamic pricing strategy can use prior demand patterns to help you alter your prices.
Business intelligence can be added to any retail strategy to help you get the most out of your online store. Whether you’re accommodating the customers’ needs, or determining how much inventory to reorder, business intelligence can be an aid to any retailer. By using these three forms of it, you can ensure success for your business down the road.
What other forms of business intelligence can retailers use to win?