You have big plans for growing your sales pipeline. But when your salespeople rely on gut feelings and intuition instead of retail analytics, you can't build a pipeline — you’re just blindly following crystal balls.
If you know retail analytics is your next step forward but you're worried about adoption or mistakes, don't be. US retailers see at least a 60% net increase in sales margins when they turn to retail analytics, even when data silos and poor analytics capabilities get in the way.
Even more advanced analytics, according to Retalon, allow retailers to "outperform the competition by 68% in earnings — and the disparity is growing exponentially."
Don't let uncertainty about imperfection or inefficient use cases stop you from taking the next step. Keep reading to see why making the switch to data instead of opinions is better, no matter how messy. We'll also explore how to minimize those missteps so you can enter the advanced efficiency phase as quickly as possible.
Retail Based on Opinion vs. Data
Experienced salespeople have developed a finely honed sense of customer behavior. They can tell when a done deal is just a step away, they know just what persuasive tactics will work, and they can gut-check which leads to focus on — except when they can't.
Opinions are more wrong than they are right, and they simply can't be scaled for strong, predictable growth. Let's see how strategies differ when they're powered by opinion versus data.
What Happens When Strategies Are Driven by Opinion?
When opinions and emotions take the driver's seat, you and your sales reps are focusing on your perspective and experiences, not the customer's.
For example, your company may have released a new product recently. You're excited about the new product, it's top-of-mind after countless internal meetings, and everyone in the organization wants the new product to be a hit. But when all of your front-facing displays feature the product and all of your brand reps recommend it to shoppers regardless of what the shopper really wants, you won't get good results. You might get a few curious buyers, but you'll hurt customer experience along the way.
Relying on your opinion can cause even more damage if you use it to power inventory, visual merchandising strategies, and forecasting. You'll overstock your shelves, overpay for inventory, displace better sellers, and frustrate your shoppers.
What Happens When Strategies Are Driven by Data?
Instead, use your opinions to fuel your search for data-based truths. If you think a product will be a big hit for a given season at a specific retail location, use retail analytics and historical performance data to see:
- How many units you can expect to sell
- What types of buyers like the product best
- How important the product should be in your overall sales strategy
Retail analytics systems use a combination of real-time inventory data, historical sales data, and competitive intelligence — as well as machine learning and powerful predictive tools — to give you comprehensive insights into your questions and product performance.
At worst, data-based insights temper your opinions so you get the optimized version of intuition-based sales. But when you use data to methodically form your product strategies, visual merchandising strategies, and marketing approaches, you'll see scalable growth and far fewer costly mistakes.
Gathering Retail Analytics
Even without those scenarios in mind, you've probably seen the devastating results of opinions-based retail and the boost in profits when retail strategies are backed by data.
But how do you start gathering all the raw data that powers good analytics? How do you pull the actionable insights out of all that raw data? And what do you do with the insights once you have them?
One way to immediately address all three questions is to use a retail analytics tool that offers competitive analytics capabilities. Then you can gain fast insight into how other businesses in your area or niche are both strategizing and performing. Over time, you'll then develop a pool of data personalized to your retail location and specific strategies.
Modern Retail Technology
Today's retail analytics tools can track product performance across multiple locations and point-of-sale (POS) systems. With real-time insights into roadblocks, dips in performance, and how slight tweaks are likely to alter performance, you can experiment with different strategies or even develop strategies remotely.
Real-time retail analytics tools are also able to work across multiple devices, so you and your brand reps are able to communicate fluidly and immediately put changes into motion. These changes can focus on in-store strategies, such as visual displays, sales pitches, and product recommendations. It can also include online sales strategies, such as the organization of products in your online catalog or the entire journey from landing page to after checkout.
Educated Brand Representatives
Your brand representatives need data and insights to do their jobs well. If you sell complex products that fit well into a collection of other products, such as different saw blades and tool attachments, your brand reps need to know what likely products your shoppers will need for successful projects. Similarly, your brand reps need to know how to identify the product shoppers are describing in vague terms or example use cases. Retail tools help provide this information.
Brand reps also feed data analytics by providing information about customer engagement, sales, inventory changes, and customer questions.
Check your opinion: You might suspect that baby boomers prefer in-store shopping the most, followed by Gen X and then millennials. But flip those last two generational categories. 31% of millennials prefer physical stores, while only 27.5% of Gen X prefer them. That's a significant enough difference that should definitely inform your sales strategies.
Use Retail Analytics to Improve Sales Process
Opinions aren't a good backbone for any sales strategy, let alone in retail. But real-time analytics tools that corporate users, brand representatives, and everyone in between can use to power strategies are the right way to grow your sales in a predictable and efficient way.
At ThirdChannel, we provide easy-to-use, comprehensive retail analytics and competitive intelligence solutions. Contact us today to learn more or to schedule a demo.