A recent report from market research leader Gartner says that by 2016, 70 percent of the world’s most successful companies will use real-time predictive analytics to plan their business strategies. With the unprecedented wealth of data available in today’s world, businesses have a new tool at their disposal that will help them get ahead of the competition — if they can make good use of it.
“The impact of integrating real-time analytics with business operations is immediately apparent to business people because it changes the way they do their jobs,” says Gartner research vice president Jim Sinur. “The most dramatic change is the increased visibility in how the company is running and what is happening in its external environment. Individual contributors and managers have more situational awareness, so they are able to make better decisions faster.”
Website Business 2 Community points out three ways that predictive analytics can help retail businesses specifically improve their return on investment (ROI):
- Predict demand: By forecasting the demand for particular products at certain times, companies can be much more specific about inventory planning. By knowing exactly which products to keep in store, they can also keep closer track of their budget.
- Pricing strategy: Manufacturing and shipping costs, demand and competitors’ pricing all influence a product’s price. With detailed insight into those factors, retailers can determine the ideal price at which they will get the highest ROI.
- Inter-store inventory: For retailers with several outlets, analytics can help them track which products are more or less popular at specific locations, allowing them to efficiently restock or move inventory from one store to another.
Retail information systems can provide sellers with all the detailed information they need to reap the benefits of business intelligence and maximize their ROI.