The crisis has set new rules for retail companies – how data analytics can help you keep up

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Nowadays, most businesses are data-driven. Using information to your advantage can help you drive change and answer your clients’ needs faster and more efficiently, which is why data is the core of evolving industries.
However, the global pandemic has changed things for companies all around the world, regardless of their field of activity. The retail sector, especially, was hit hard by the international health crisis. Since the pandemic started, for retailers, grasping data has become more difficult than ever, not to mention analyzing it correctly and drawing the right conclusions. There has been a lot of confusion for business owners, who now have to deal with unprecedented customer behaviors.

When the first lockdown was announced, more than one year ago, sales on certain departments dropped, while others suffered a boom, which changed the game even for the most stable companies. Customers were rushing to stock up on products they would not normally need in large quantities, such as canned foods or cleaning products. This was a never-before-seen trend in customer behavior and a huge problem for suppliers and salespeople. For this reason, the sales information flow suffered transformations that left specialists confused and made predictions almost impossible. Normally, a healthy flow is based on customer demand, sales predictions, or loyalty programs, and influences a wide array of critical business decisions.

However, at the moment, many retailers operating both online and offline, are facing an information deficit. This is due to the unstable data and intelligence derived from sales transactions, which comes as a result of particular shopping habits caused by the pandemic. This has affected all businesses, which now find themselves in the position of venturing into unknown markets and trying to reach unpredictable buyer personas. Not even the FMCGs or the supermarkets are spared difficulties, despite being immune to lockdown and, hence, economic recession. They are striving to support business continuity, using the little data they are provided with, different from historical market trends.

But during a crisis, fast decision-making is crucial for the survival of a company. And making business decisions without data is like driving a car on an unlit road. That is why leaders have to deal with challenges such as identifying rapidly changing trends and responding to volatile supply and demand while maintaining a clear picture of their organization’s performance.
The situation is indeed complicated, but fortunately, BI and data analytics technology offer many opportunities for those who must navigate these uncertain times. In the retail industry, especially, there is an evolving need for data and analytics generated by crisis management practices.

Investment in data analytics have increased in 2020

The retail sector has been forced to rethink its business strategy, which is why there has been an increase in terms of budgets allocated to analytics and intelligence.
At the beginning of 2020, large corporations dominated the big data analytics market, with a share of more than 60%. However, the pandemic forced the digitalization of SMEs, which lead to remarkable growth in terms of BI, AI, and analytics adoption during 2020. Although this change has affected companies across different industries, the retail industry is one of the ones that have made the largest investments in data analysis, together with Media and Government. The use of performing analytics and forecasting tools may help retail companies compensate for the lack of stable sales data and provide them with predictions to help make informed business decisions.
Here are some areas where BI and predictive analytics can help:
The need to adapt to volatile circumstances
During these unprecedented times, retail companies must keep up with rapidly changing circumstances to survive. There has been an increasing need for identifying patterns, forecasting sales performance and establishing next steps, which is why unlocking data and transforming raw information into actionable intelligence is so important. Some retail companies already implemented analytics solutions and used dashboards to identify atypical behavior daily, but before the pandemic, the usage of these dedicated solutions was low. However, with the changing circumstances, it is important to have a solution that is performing, scalable and can keep up with any business continuity plan, regardless of the situation. A well-modeled dashboard is the key to success when it comes to a timely response and fast decision-making.
Having control over the supply and demand chain
The pandemic changed people’s buying behaviors globally, which is why there are great shifts in supply and demand that enterprises must keep up with. FMCGs and retailers must leverage their intelligence, to be able to supply their clients with the products they need, when they need them. From wholesale activity to grocery stores, all companies must rely on analytics and forecasting tools to understand what comes next. For instance, one of the most relevant changes has been the shift from office day-to-day goods to home goods and individual purchases, taking into consideration that most people have been working from home and started shopping at their local stores. Based on specialists’ predictions about when it is safe to go back to traditional workplaces, retailers will have to analyze the situation and forecast when customers will resume their habits.
Being prepared for new challenges
During the COVID-19 pandemic, companies have reported that they are using BI and analytics to improve efficiency in their strategy, support customers and predict changes and outcomes. Decision-makers are more likely to expand the way they use Business Intelligence and predictive analytics because they want to see farther in the future and be ready for whatever life throws at them – business-wise. This way, they can cut costs and reduce expenses, to invest their resources in those areas of the business that can make the enterprise thrive even during the hardest times.
Having a clear point of view on the big picture
Transforming data into actionable information is the key to maintaining a clear picture as far as business performance is concerned. Understanding what works and, even more importantly, what does not work is crucial to navigate volatile circumstances and make long-term decisions.
One of the biggest changes has been the fact that people were forced to stay in, which brought many new purchase trends. For instance, the habit of eating in instead of eating out has made people buy more food that can be prepared at home, but this is not something that will go away soon, both because of economic and safety reasons. That means that supermarkets and FMCGs should be ready to supply fresh food long after the pandemic is over. Nevertheless, many customer behaviors, different from the ones before, will remain even after the crisis passes and the economy slides back to normal, and retail companies must be prepared.