5 Strategies For Retailers To Secure Successful BI Adoption
By Vinod Samanthula and Vikram Jain, Advaiya
Myriad retail businesses are greatly benefitting from the use of business intelligence (BI) solutions. There are many ways a retailer can use BI to help them improve their business, and their sales and marketing strategies.
For instance, with BI, retail managers can predict the lifetime value of customers and take appropriate actions to help match selling products and services based on a specific customer’s interest and needs. From here, companies can use BI to develop an appropriate omni-channel experience for each customer’s preference for evaluation and buying. Some might prefer to buy via the Web, while others might choose to purchase from a direct mailer. BI helps to formulate a diversified communication platform that interacts properly for each customer’s buyer journey.
BI also can help retailers increase the average basket size for customers by determining their buying patterns. With this knowledge and analytics, they can take make appropriate actions such as developing customer loyalty programs, deploying promotions, and identifying products to customize a bundle offer with individual sales.
Another consideration for the utility of BI is customer churn. Evaluating churn helps retailers determine how many customers were lost over a given period and what that loss means for sales. From there, customer retention programs can be determined such as the 80/20 rule – focusing on achieving the majority of your sales from your best purchasing customers. Or additional marketing strategies can be developed for acquiring new customers.
BI also can play a central role in growing sales and revenue with target marketing to identify, influence, leverage, and even create micro-segments, for example, marketing responders, discount chasers, impulse buyers, returners, and power shoppers.
Operationally, BI can help retailers optimize checkout, floor plans, product placement, and inventory based on predicted customer demand and historical purchasing data.
Despite all of these advantages for retailers to use BI, many are still too slow to adopt these technologies, while for others, many have tried to adopt BI but have often fallen short of expectations.
One of the primary reasons BI strategies fail is the lack of alignment between organizational processes and technological factors. These core areas need to be aligned appropriately. They must receive central business focus, in a way that everyone can identify with them to take an active part in fully utilizing the potential of BI solutions.
BI adoption rates can increase if every employee making use of BI solutions has a strong sense of involvement and ownership in all strategic areas.
With that, let’s consider several key strategies that can be deployed for successful BI adoption in an organization.
- Define and monitor data quality standards during the initial implementation phase. Data quality is the primary factor that can make or break any BI initiative. This is because users will immediately judge the capabilities of any BI system by the result it generates when they use it for the first time. The results and insights generated from any BI system largely depend on the data quality. If the initial results are promising and accurate, then only the users will show interest in using the system again; thereby, increasing the BI adoption in the organization.
- Real-time integration between the BI system and other third-party ERP and CRM systems. The real potential for generating actionable insights from any BI system is highly dependent on the successful integration of the BI system with legacy ERP and CRM databases. This integration is also essential and it should include all the departments’ data in the BI implementation phase to provide visibility for their deliverables and respective business drivers. In larger organizations, it is imperative to have the Project Management Office (PMO) manage the BI implementation project and to have a senior executive taking ownership of the implementation project. If an organization doesn’t have the PMO, the best approach is to define a project leader who will oversee and manage all aspects, from the formulation of the BI roadmap strategy to implementation daily.
Retailers can consider a Customer Data Platform (CDP) that enables them to consolidate all data sources into a unified, central database to formulate a clear picture for every customer and to aid them in taking action to drive new business to that customer. Microsoft Dynamics 365 Customer Insights is an excellent choice for a CDP.
- Business results-driven approach. An organization must always keep the focus on the strategic business drivers for developing a good BI system. This approach can provide more significant insights that can turn into revenue. A constant emphasis on the business results will keep the BI project’s focus and intensity on a higher level until the project is completed. Thus, the result-driven approach will lead to successful BI implementation and adoption in an organization.
- Identify Key Performance Indicators (KPIs). Any organization would want to see its BI applications showing an analysis of its KPIs that represent its business objectives in both the short and long run. An analysis of the KPIs will help the organization to spot the areas for improvement. A successful BI strategy will always consider the company’s overall strategy and map it to align with the company KPIs. Thus, for the successful adoption of BI solutions and applications, it is critical to identify and analyze KPIs from the users’ data.
- Select a flexible and agile BI application. Any user of a BI system would want an application that is flexible and agile enough to accommodate and allow changes according to the changes in indicators and requirements. A BI application that has some of the essentials features like content creation, data, and its infrastructure management and embedded analytics will undoubtedly set the foundation for the organization to implement BI and thereby increasing its adoption rates in the organization.
Closing Thoughts
The global BI market continues to grow rapidly. For the retail industry, BI has become a buzzword, but unfortunately, very few retailers and e-commerce businesses are reaping the full potential of BI. However, the five strategies discussed can surely help increase BI adoption rates in retail organizations to help them recognize the numerous, corresponding benefits resulting from their successful BI implementation. And in the end, that means more sales for the retail business.
About The Authors
Vinod Samanthula is a Senior Associate at Advaiya, providing end-to-end business intelligence solutions to organizations. He has experience with multiple technologies and platforms such as Power BI, SSIS, SSRS, SSAS, SQL, and Azure Data Factory.
Vikram Jain is a Practice Director at Advaiya. He is a technology enthusiast with extensive experience in designing and developing information systems and managing business processes and projects for hyper-growth companies.