Having confidence in analytics can be a difficult concept to grasp. Fully embracing the intelligence can sometimes run up against the human practices used across the industry for years. The retail sector is no different and has struggled in some areas, completely capitalizing on the power of data. The value of data can be seen in optimizing prices, inventory control and management, and personalized customer service delivery.
One of the challenges facing retail is in pricing. Traditional pricing models dictate that seasonal item prices are reduced at the close of the season to make room for the next merchandise flow. This principle has been a firm tradition that has been religiously practiced by retail and expected by customers. The practice of seasonal clearance is a tradition that would be hard to shake. The test for retail was to employee analytics to reduce the price of seasonal merchandise, before the traditional cut-off date and implement those price reductions as sales of items slow, but before sales hit the low point. Studies have shown that when using a human control group vs. predictive analytics in this concept, analytics performed at least 90% better than the human control group. These numbers have convinced retail of the value in predictive analytics in pricing.
These initiatives not only will affect pricing and customer service, but will firmly impact inventory control. If you consider the challenges in the fashion retail sector, there is a great deal of complexity involved in managing and controlling inventory and sizing requirements to meet customer needs. These controls not only benefit retailers on a national level, but allow them to precisely manage inventory down to the individual store level, based upon customer demands. Again, the performance of analytics software can surely outpace the traditional human based models.
Retail will enjoy significant increases in their financial performance and customer satisfaction across the industry, in all sectors. The key to success will be to have the right partner, with the right expertise to provide retail with the tools required to succeed.
Data Ladder is the right partner for retail with their tool ProductMatch. Speed and accuracy in the software combined with the expertise of Data Ladder can provide retail with the product data solutions that they require.
Go to dataladder.com and download a free trial and experience the Data Ladder difference!