Retail Stores: How Business Intelligence Boosts Profits

Your Source for Restaurant Marketing & Retail Marketing Best Practices

Posted by Robin Johnston on Apr 20, 2017 9:22:00 AM
Robin Johnston

Every retail store owner remembers James Earl Jones's prolific voice in the movie Field of Dreams, whispering to Kevin Costner, "if you build it, he will come." While that sounds great, we know better.

As retail store owners strive to boost profits on limited resources, faith and trust don't fill the bill. The guesswork required when selecting merchandise for target customers, creating promotions to motivate new purchasers to visit, and determining the amount of inventory and staffing required to meet demand is enough to drive you back to that Magic 8-Ball from childhood.

It's not just the assumptions that are difficult to perfect.  It is also knowing if those assumptions were correct. Did the selected merchandise attract the target customer? If not, who did it attract? Is the promotion driving the results you sought? Is your inventory and staffing appropriately meeting your demand?

Data Trumps Guesswork

If you were Kevin Costner's character, Ray Kinsella, wouldn't you have said, "Can you back that up with data, please?"

That's because today, data is king. And with emerging tools like Wi-Fi marketing and analytics platforms, that data is within reach. If you would like to streamline operations, make better business decisions and drive sales to increase profitability and grow your business, Wi-Fi Analytics for retail will help.

By providing retail business intelligence to brick and mortar store managers, they can reach revenue goals with focused precision rather than using Ray Kinsella's approach of guessing and praying.

how it works

You might be wondering, what kind of data are we talking about and how can I leverage it to achieve business goals? First, your social Wi-Fi platform recognizes each unique web-enabled device in range of your shop. It can then create a consumer profile for each customer represented by a device. It can also establish an age range, gender, and connected social networks.

Each time a customer enters your establishment, the Wi-Fi analytics platform captures his or her activity and behaviors. For example, it notes the length of time spent in the store and the purchases made. Visitation and spending patterns help to develop the customer profiles. When integrated with your point of sale system, it can also help you develop strong buyer personas. 

Customer Profiles for Marketing

Once you have customer profiles, you can segment your customers into groups. Some possible segments that would benefit from different marketing messages to motivate specific desired behaviors include: frequent customers (those who visit more than three times a week) versus infrequent customers (visit once a month); big spenders (purchase several items or large ticket items) versus minimal spenders (purchase only one item per visit); and window shoppers (purchase an item in one out of three visits) or buyers (purchase an item every time they enter the store).

With insights about who your customers are, your managers can target promotions and automatically track them through the social Wi-Fi platform. For example, you may decide to offer a store coupon to infrequent customers to see if it will generate more store visits. A Wi-Fi marketing platform tracks the promotion to determine if these customers change their behavior and visit more frequently. No more Magic 8-Balls required.

Customer Profiles for Business Forecasting

You may notice over time that your total number of customer visits is declining. It would be difficult to determine what is actually driving this phenomenon without the appropriate retail business intelligence. Is it because infrequent customers are not becoming frequent customers as rapidly as in the past? Or because frequent customers stop patronizing the store at an alarming rate? Or, is it something else?

Some customer attrition is normal. Armed with data to understand your churn rate--an estimated likelihood that customers have stopped patronizing your store--you may adapt your marketing strategies to focus on increasing the spending or loyalty of existing customers, on generating new customers, or on transitioning new customers into frequent customers. And with data, you are better suited to tackle the tricky balance between reducing churn and maximizing profitability.

Business intelligence for retail stores makes shop managers more nimble to adapt to shifting customer behaviors before they impact revenues and profitability. Not to knock faith and trust, but knowledge is power. Power provides sound business decisions, increasing revenues and profitability.

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Tags: Retail Marketing

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