What's the number one way to ensure a successful holiday season?
According to a quick poll taken by Looker of top retailers attending Chicago's Big Data & Analytics for Retail Summit, the answer is to understand customer behavior to drive sales and build loyalty, according to 66 percent of those questioned. Of course a group of professional attending an analytics event would put understanding customer behavior atop their lists, but regardless, effective use of business intelligence will give retail companies a strategic edge this holiday season and beyond.
The Looker poll also revealed retailers' top challenges with business intelligence include ad hoc report requests that take up the majority of analysts' time (34 percent). Other challenges include the inability to collaborate across the business to uncover data insights (31 percent), disjointed data that hinders decision-making (31 percent) and standardized reports that don't allow the full analysis of data (16 percent).
With these findings in mind, Looker CEO Frank Bien provided three data tips to boost holiday sales this season: (1) identify your most valuable customers; (2) rev up your referral business; and (3) learn from your returns. As for identifying a retailers' most valuable customers, this can be done by using transaction data to identify which customers bring the most consecutive value. Then, Bien advises retailers to focus their best efforts on those with the highest lifetime value by targeting them with special offers and intuitive product mixes. In other words, a merchant's most valuable customers should not have the same experience as, say, a first-time customer.
Bien's tip to "learn from your returns," will be especially useful for retailers this holiday season as UPS and comScore report that the percentage of people who return items has gone up. With this in mind, merchants can use their analytics to identify what products or specific sizes are returned repeatedly. Bien suggests that from there, they can choose to modify their products or revisit vendor stocking decisions.
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