by Patrick Vernon, freelance writer.
In the era of Big Data, and the need for organizations to make best use of the mountains of raw information being generated constantly through interactions with potential and actual customers, retail businesses are in a position to use this data to run a more efficient business and serve their customers better than ever.
What data is available for retailers and how does it help?
Every time a customer makes a transaction with a retailer, whether online or face to face when their sale is recorded by the bar code reader, data is processed through POS software and stored.
From here information about sales trends, stock levels, the customer’s buying preferences and whether they’re a new or repeat purchaser is locked away ready to form part of the overall picture.
EDI (Electronic Data Integration)
EDI is a process whereby data is used to help streamline the retailer’s business activities and make them more efficient such as in controlling stock levels and vastly reducing paperwork by creating digital invoices, dispatch notes and more.
So, data can be used to inform in the following ways:
Stock levels - as soon as the customer buys, the POS system reduces stock numbers accordingly in ‘real time’.
An alert can be used to prompt re-ordering when stock reduces to a certain level.
Sales performance - data can show how many of a certain product is selling, from which location, for what price and who sold it, whether an individual or a team of sellers somewhere such as at an exhibition or market stall for example.
Tracking the customer - if it relates to a new customer, then a data file can be created immediately when they give address and other contact details.
If an existing customer, the purchase they’ve just made can be recorded against their buying history enabling the retailer to help build up their ‘buying trends’ or ‘buying preferences’ profile.
Customer retention and repeat sales - it’s far easier to sell to existing customers than find new ones, so the above tracking data can prove invaluable information for building and maintaining a relationship with that customer and serving them better - although the ‘personal side’ of face to face customer interaction shouldn’t be forgotten.
By analyzing what the customer buys, along with when and how often, offers and maybe incentives can be created for that particular customer. It’s similar to the way supermarkets produce money off and points vouchers based on an individual customer’s buying habits.
Other tech such as advanced analytics platforms can be added to help accurately profile customers and analyze how they engage with the retailer’s store or business premises; they use data from the retailer’s POS systems and other sources to help build an accurate customer profile.
Determine future trends and policies - this data can then inform the retailer as to how to move on in their business.
For example, it may point to whether dropping certain products from the range is appropriate; whether to run certain offers again that proved popular with certain segments of the customer base or, by the same token, to abandon (or at least revise) certain offers and initiatives that maybe weren’t as successful as planned.
The data opportunity
Modern POS systems provide retailers with a great opportunity to capture and constructively use useful data that can help them run a sleek, efficient business with minimal waste.
Furthermore, it helps a business gear themselves towards customer retention and selling to existing customers easily by knowing what they want and serving them accordingly.
Patrick Vernon is an experienced freelance writer, specialising in business and finance related content. Patrick has gained experience writing for a variety of magazines and websites, researching the latest money saving tips and offering his advice to the public.