Almost all retailers believe that Business Intelligence (BI) is either very relevant (62%) or somewhat relevant (32%) for obtaining key performance data to control internal processes and compare actual performance data against plan, according to [download page] a report released in November by RSR Research. Data from “The Intelligent Retailer’s World of Insight” indicates that a majority (57%) also finds BI to be very relevant to understanding customer behaviors in order to executive business strategy and build loyalty. And while a lesser proportion (36%) find it very relevant to helping plan product assortment, allocation, pricing and promotions, more than half see it as somewhat relevant to those business processes. RSR notes that the report considers “BI” and “Analytics” to be interchangeable.
Retailers with comparable store/channel sales growth of over 2%, dubbed “Retail Winners” by RSR, appear to have a slightly different focus: for example, 40% find 360 degree views of the business to be very relevant, compared to 15% of all other respondents. According to a November study from the e-tailing group, just 28% of marketers say they currently receive a 360-degree view of their customer’s engagement with them, with only 4% strongly agreeing with that statement. In May 2010, a study by Aberdeen Group found that almost two-thirds of best-in-class retailers cited the need to increase overall consumer insight as a pressure driving BI adoption.
Enterprise-wide BI Strategies Not Yet Commonplace
Although most retailers see the value of an enterprise-wide BI strategy for consistent delivery of data across channels, geographies, departments, and roles, less than half have such a strategy in place, while 1 in 5 do not place it at the top of their priority list. Even so, 35% are working on putting such a strategy in place, meaning that widespread adoption could be on the way.
According to the 2010 Aberdeen Group survey (see link above), 63% of best-in-class retailers were turning to enterprise-wide BI at that time, while 56% reported having established well-defined skillsets related to the delivery of actionable data within the enterprise.
Speed is Top Challenge Creating Interest
When asked to identify the top 3 business challenges that create an interest in using near-real-time BI, the 2 most frequently-cited were related to speed: more than half of the respondents cited their inability to get information to merchants quickly enough, while slightly less than half said they get the information, but are not able to act quickly enough on what they receive.
Meanwhile, Retail Winners are less than half as likely (28%) as the rest of the respondents (60%) to say that they are unable to identify their best customers to offer special incentives to them while they are shopping.
Customer-Centric Data Lags
While 3 in 4 respondents say they deliver near-real-time current sales (best sellers/worst sellers) information to their constituents, most are struggling to pass along information that might help make them more customer-friendly: just 39% are delivering hot promotions information on a near-real-time basis, while only 1 in 3 are delivering customer complaints information on that basis.
- Higher customer retention is the primary opportunity most respondents see from real-time BI.
- More than half of the respondents say Brick and Mortar stores can gain the most benefit from near-real-time BI, followed by e-commerce (14%) and mobile commerce (10%) channels.
- Siloed information is by far the biggest operational impediment to delivering new generation BI capabilities.
- 9 in 10 see potentially at least some BI value from Facebook, although only 69% have actually achieved some value from the social network. In January 2010, research from Kognitio and Baseline Consulting found that 63% of BI professionals said they were “undecided” about the value of data collected from social media sites to help them understand more about their organization or customers.
About the Data: RSR conducted an online survey from July to October 2011 and received answers from 95 qualified retail respondents. Roughly one-third had 2010 revenue of less than $249 million, while 44% had 2010 revenue of over $1 billion.