At a time of increasing competition across the retail sector, the importance and value of retail business intelligence (BI) are growing by the day.
To keep up and get ahead of their rivals, businesses need to use every piece of data at their disposal, from sales statistics to marketing data and beyond. Retail intelligence tools and techniques make this possible, empowering organisations to gain the necessary insights to strengthen their operations across the board, provide superior customer interactions, elevate their sales metrics, and make smarter, more impactful decisions.
This guide explores what retail BI is, how it works, the benefits it brings, and the growing significance of BI in retail today.
What is Retail Business Intelligence?
In a nutshell, retail business intelligence refers to the use of various technological tools and methodologies to gather retail data and learn from it. It is about transforming raw data from vast fields of figures and statistics into meaningful, actionable insights that businesses within the retail environment can actually use to make decisions and inform future strategies.
An example of retail intelligence in action might include brands using inventory tracking software that tracks inventory levels in real-time to avoid common problems, such as overstocking or stockouts. We can also see BI in retail firms using price or promotion tracking tools to fine-tune their pricing and promotional strategies and boost sales.
Indeed, numerous tools and components can form a part of a larger retail BI strategy, including:
- Analytics and visualisation tools that provide clear visual depictions of data sets
- Customer relationship management (CRM) solutions for in-depth customer data
- Big data analytics techniques to make sense of massive data sets
- Artificial intelligence (AI) tools to extract data insights and predict future trends
- Competitor pricing analytics to dig into the pricing strategies of rival firms
Why Retail Intelligence Is More Important Than Ever
For today’s retail companies, retail business intelligence is not an optional extra or helpful bonus. It is a must-have. That is because the retail industry is more fiercely competitive than ever before and is evolving at a rapid rate, thanks to the rise of eCommerce. This has opened up whole new ways to shop, giving customers more options and changing their expectations enormously.
Now, customers not only have more places to buy from but also more information and an array of helpful tools—like price comparison platforms, online reviews, and click-and-collect services—to support their shopping journey. Because of this, they are more discerning than ever, and brands have to be at their best—with the most competitive pricing and fluid customer journeys—to succeed.
This is particularly relevant in some of the retail industry’s fast-paced niches, like fast-moving consumer goods (FMCG) and consumer packaged goods (CPG), which focus on everyday items like food, drink, and household essentials. Prices of these goods can change rapidly, and brands are increasingly turning to retail BI to stay one step ahead with inventory management, pricing, etc.
Key Benefits of Retail Business Intelligence
| Benefit | Explanation |
| Build customer profiles | BI in retail helps firms learn more about their customers, including key data like where they are based, how they found the brand and its products, and how they prefer to make purchases. |
| Understand customer behaviour | Retail BI can also help businesses learn more about how their customers behave and what motivates or pleases them, like whether or not they join and engage with loyalty programs. |
| Improve customer experiences | By learning more about customers’ circumstances, expectations, and desires, brands typically find it much easier to cater to them, improving and personalising their shopping experiences. |
| Understand strengths and weaknesses | Through techniques like retail audits and assessments, firms can better understand their own position in the market, as well as what they are doing well and where they need to improve. |
| Strengthen strategies in pricing and promotions | Methodologies like price benchmarking and promotion tracking provide businesses with the actionable insights they need to adjust prices and plan sales at the right times to see results. |
Ultimately, all of these benefits, and others not listed above, can help retail businesses improve the metrics that matter the most – sales, revenue, profit, customer acquisition, retention, and lifetime value. Retail BI provides the insight and intelligence every firm needs to operate more efficiently and effectively as a whole.
Examples of Retail Intelligence in Use
All of the biggest and most successful retail brands of today use retail business intelligence in some form or another, and many have complex, multi-layered intelligence strategies to use all of the data at their disposal to improve their operations. Examples of BI in retail in action include:
- Price Optimisation and Competitive Edge: One of the largest retail firms in the U.K. uses Assosia’s expert team for offline price and promotion tracking. Assosia’s experts visit physical store locations to log price data, report back to the client, and then show them how to use that intelligence to adjust their prices to remain aligned with their rivals.
- Improving Inventory Management: Many companies in fields like FMCG and CPG use business intelligence tools to assist in keeping track of their stock. Various platforms can monitor stock levels in stores, warehouses, and distribution centres in real time, issuing automated alerts when restocking is required.
- Product Performance Analysis: Some retail firms also use data analysis tools to assess the performance and relative success of individual products. They can track sales data for each product to make decisions regarding restocking or diversification of their product offerings, following customer behaviour.
Challenges of Retail Business Intelligence
For all of its many benefits, retail business intelligence is not always as illuminating and valuable as it should be. Retailers may face challenges when attempting to dig into their data and extract the insights they need, including:
| Challenge | Explanation |
| Poor quality data | Business intelligence will only produce helpful insights if you have the right type of data to work with. Firms may have poorly organised or inconsistent data that fails to provide value. |
| Integration and compatibility issues | Firms may wish to make use of various retail BI solutions, but they may not all work well together. This can lead to delays, disruptions, and overall difficulty in establishing a clear BI framework. |
| Training and execution of BI strategy | A retail intelligence strategy is only as effective as the people putting it into action. Team members may struggle to understand or use certain intelligence tools and techniques. |
A retail intelligence strategy is only as effective as the people putting it into action. Team members may struggle to understand or use certain intelligence tools and techniques.
Emerging Trends in Retail Business Intelligence
Just as the retail world is rapidly evolving, so is the field of retail business intelligence. Current and expected future trends include:
- Increasing use of AI and machine learning to derive insights from data
- More mobile-friendly BI solutions for data analysis on the go
- Greater focus on real-time data for rapid, instantaneous business decisions
- Integration with “Internet of Things” (IoT) devices, offering new data collection points
Embrace Retail BI Now for Future Success with Assosia
There is no doubt that retail business intelligence is paramount for present and future success in the fiercely competitive retail world, particularly in spheres such as FMCG and CPG. It is only by analysing data that brands can make truly informed, accurate decisions about everything from pricing strategies to marketing campaigns.
Those who understand and embrace retail BI now – using tools like Assosia’s comprehensive retail analysis, price benchmarking, and competitor pricing analysis solutions – will be much better placed to overcome the obstacles of the future and enjoy long-term success. If you feel that your business would benefit from deeper, stronger intelligence, make the change today.