Leverage Retail Analytics to provide exceptional personalized experience to your customers

December 6, 2023 By: Protik Kundu

In today’s fast-changing digital era, businesses must understand how consumer behavior is evolving to stay relevant and competitive. There have been significant changes in consumer behavior in the market. Traditional demographic segmentation is being replaced by psychographic and behavioral segmentation as brands aim to gain deeper insights into consumer thoughts and behaviors. For instance, millennials value experiences more than material possessions and gravitate toward brands that provide personalized and experiential services. According to McKinsey research, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen. It also states that personalization can reduce customer acquisition costs by as much as 50%, lift revenues by 5% to 15%, and increase marketing ROI by 10% to 30%.

The urgency for businesses to adopt Retail Analytics is clear in the evolving retail landscape. With online and offline shopping experiences continually merging, and customer preferences changing rapidly, data-driven decision-making has become paramount. Retail Analytics provides the means to understand consumer behavior, optimize inventory, forecast demand, and fine-tune pricing strategies. Organizations that embrace these insights gain a competitive edge by offering tailored shopping experiences, improving operational efficiency, and staying ahead of market trends. Neglecting Retail Analytics may result in missed opportunities, reduced competitiveness, and inefficient operations, making it an essential tool for thriving in the modern retail industry.

Amazon, for instance, utilizes retail analytics to become a retail giant by providing personalized recommendations based on individual browsing and purchase history, thereby enhancing the customer experience. Undoubtedly, retail analytics will continue to play a crucial role in helping businesses navigate changing consumer behavior.

Let’s delve deeper into how retail analytics is the key to tackling changing consumer habits in order to thrive in this volatile market.

Understanding Changing Consumer Habits

As consumers become more empowered and connected than ever before, their preferences, expectations, and purchasing behaviors undergo significant changes. To meet their dynamic demands, businesses must delve deep into the intricacies of these changing habits, unraveling the underlying motivations and patterns driving consumer choices. By gaining insights into these shifts, companies can effectively tailor their strategies, products, and services to meet the evolving needs of their target audience, ensuring long-term success and sustainable growth.

Here’s how customer data analytics can help understand customer habits:

  • Gathering data on consumer behavior and preferences through retail analytics: By identifying the emerging beliefs, habits, and “moments of truth” of consumers, retailers can encourage positive behavior while promoting new offerings. Companies should also avoid challenging consumers’ beliefs and instead leverage contextual cues to sustain new habits based on customer segmentation in retail.
  • Analyzing consumer beliefs and behaviors at a granular level: To truly comprehend shifts in consumer behavior, it’s imperative to scrutinize their beliefs and actions on a detailed level. Predictive consumer recommendations in retail, such as evolving habits, emotional-need states, and occasions, are accelerating this rapid transformation. Consequently, retailers must not solely focus on product sales but also scrutinize consumer beliefs and actions on a granular level.

Retail solutions like JK Tech’s Hyper-personalization solution allow retailers to influence emerging habits, reinforce newfound positive beliefs, and incorporate contextual cues to sustain new habits.

Tackling Changing Consumer Habits with Retail Analytics

There are different types of retail analytics that retailers can use for decision-making, which include studying foot traffic analytics, tracking consumer behavior, and using predictive analytics. However, it is crucial for retailers to be committed to data quality and to act on the insights gained from analytics.

By integrating retail analytics software with other retail technology solutions, such as point-of-sale software and retail management systems, retailers can comprehensively look into all aspects of their business and use the insights to improve performance.

Here’s how retail analytics help tackles changing customer habits:

  • Collect and analyze customer data: Retailers can use various sources such as customer surveys, loyalty programs, and social media monitoring to collect data on consumer behavior and preferences.
    Effectively gathering and analyzing data is crucial for retailers to make informed decisions that can ultimately improve supply chain efficiency, enhance customer engagement, and boost performance. While some established retailers have already undergone a technological transformation, many still lack the essential tools, processes, and capabilities to tackle advanced retail challenges. However, adopting the core principles of digital transformation – primarily a test-and-learn mindset that prioritizes experimentation and data-driven decisions – can pave the way for retailers to thrive in today’s competitive market.
  • Use predictive analytics: Predictive analytics can help retailers anticipate future trends and consumer behavior, enabling them to adjust their strategies accordingly. Retailers can use machine learning algorithms to analyze customer data and make predictions about what products will be in demand in the future.

    JK Tech offers Supply Chain Optimization solutions to retailers, leveraging technologies such as Machine Learning, Data Analytics, and Artificial Intelligence to enhance supply chain efficiency and improve the bottom line. The solutions enable retailers to accurately predict consumer demand, optimize inventory levels, improve product availability, reduce stockouts, and increase sales. The solution suite includes Supply Distribution Control Tower, Supply Network Optimization, Logistics Optimization (Last Mile & Mid-Mile), and Warehouse Operations Optimization.

  • Monitor industry trends: Retailers should keep an eye on industry trends and developments, such as new technologies or changes in consumer behavior due to global events. This information can be used to adjust marketing strategies and product offerings and shape emerging habits with new offerings based on consumer demand.

    Retailers can improve their profit margins with a customer-focused merchandizing solution that identifies effective pricing strategies for their products. By analyzing market trends, customer behavior, competitor pricing, and other key factors, the solution determines the optimal price point for each product. Real-time insights into pricing changes are provided, enabling retailers to quickly adjust their pricing strategies in response to market conditions.

  • Leverage technology: Retail analytics tools such as point-of-sale systems, connected store intelligent solutions, and Hyper-personalization solutions can provide businesses with real-time insights into customer behavior. These solutions offer retailers valuable insights into their store operations using analytics and technology, enabling data-driven decisions to improve efficiency and profitability. This includes actionable insights from customer transactions, behavior, and staff productivity to design superior shopping experiences and integrate insights with store operations and planning systems for personalized journeys.
  • Micro-Segmentation: By dividing customers into smaller micro-groups based on their behavior and preferences, retailers can create more targeted marketing campaigns and tailor their offerings to specific population segments. This results in sustaining new habits by using contextual cues and aligning messages to consumer mindsets.

JK Tech’s Hyper-personalization solution enables retailers to gain rich customer intelligence and provide personalization experiences to their customers through advanced Data Engineering, AI/ML algorithms, libraries of customer data models, and personalized recommendation engines.

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Protik Kundu

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