Retailers think they know how business intelligence can help them improve sales, but many still struggle to use the technology effectively.
According to a study of 200 retailers by research consultancy Aberdeen Group, 71% already use or have plans to use business intelligence. The top benefits? Seventy-two percent says BI and predictive analytics are needed for more rapid response to consumer demand, followed by operational efficiency (noted by 67%), and the need to manage demand across multiple channels (cited by 52%).
The top three business strategies retailers intend BI and predictive analytics to address are improving customer service (48%), improving merchandising (39%) and improving lifetime value of customers and promotions effectiveness (tied at 36%).
But turning mountains of data into actionable information is no easy task. Almost half say dirty data was or is a primary obstacle to implementing business intelligence, and 44% have faced challenges dealing with data that was scattered throughout their organisations. Also tough is getting the data itself. Thirty-six percent of respondents say they don't now or didn't used to have enough customer-specific information to generate valid results.
Companies cite several ways they plan to overcome these challenges. Fifty-nine percent are using or have used data cleansing projects to improve data quality. Forty-one percent say executives have to mandate change. And 39% are bringing in outside help or piloting small projects to measure ROI.
Sahir Anand, an analyst with Aberdeen, says smart companies get top-level executive support and make clean data a priority. He believes business intelligence is a crucial tool for transforming the many sources of data into useful information. "Without business intelligence tools, it's going to be a lot of gut-feel decisions in terms of how you plan your merchandising strategy to fulfill customer demand," he says. "And that just doesn't work well."