Even the smallest retail businesses can benefit from today’s rich analytical data. When sales data are aggregated with product movements and customer habits, businesses can build a complete picture of their customer base and predict their activities. When leveraged properly, this can dramatically reduce customer churn.
Frank LoBue, an experienced operational retail professional, details how small retailers can build a data-driven approach to increasing sales.
What Kinds of Data Do Businesses Collect?
Businesses are able to collect data on how much a customer spends, what products they buy, how frequently they visit the store and the customer’s basic demographics. This is easier for small online retailers than it is for brick-and-mortar stores, where sometimes the only data collected is the items bought and the price of these objects.
In order to collect more data, it may be a good idea for small retailers to start a customer loyalty program. By signing up for customer loyalty programs which are tied to a phone number, email address, or loyalty card number, it is possible to track a particular customer’s behavior over time. It is wise to make a customer loyalty program attractive to the consumer by offering special coupons and sales. This makes it more likely that the consumer will want to share personal information with your business.
Another important source of data is your company’s social media presence. It is possible to track the effectiveness of marketing campaigns based on the number of likes and re-shares of your social media posts. Use social media analysis tools to find out how many click-throughs and sales conversions you get from each post.
You can also track your social media pages’ effectiveness over time. Be sure that you are on each social media site that makes sense for your customer profile and try to come up with unique content for each one. Different segments of the consumer population will respond better to different forms of marketing.
What Is Data Analytics?
While big-picture data is useful for any retail business, data analytics focuses on the smaller details of a company’s operations. Analyzing data at a smaller level can help retailers find the patterns in how customers behave. Data analysis on this level searches for hidden ways that a business can become more profitable.
The simplest way to get started with data analysis is to buy software that can integrate your customer relationship management, accounting, and sales, whether they are online or in person. These software programs can be expensive, but they are worth it for businesses that want to become more successful. A few examples of these software packages include Sisense, Looker, and Zoho Analytics.
What Are the Advantages of Data Analytics?
When companies have full access to their customer data, they can make critical decisions in their buying decisions, customer targeting, and basic business practices. Seeing their organization in a new way can be an important competitive edge for the small business.
Data analytics allow a company to generate profits while keeping costs down. Unnecessary expenses can be trimmed, and spending can be concentrated on the most crucial areas. The effectiveness of each salesperson can be tracked and analyzed as well.
Choosing Data Analytics
Small retail businesses are already up against some staggering competition from larger big-box stores and the internet, and any advantage they can glean from their data analysis will make a big difference in sales.
A full understanding of the data associated with a business can give companies a leg up on the competition, using tools that only the largest retailers have employed in the past. This may help to level the playing field. Frank LoBue holds that data analysis can be an important part of a small retail company’s future success.
