Friday, March 2, 2012

Monitoring The Pulse of Retail - Business Intelligence Tools for the Retail Trade

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Bricks and mortar retailers are under increasing pressure to compete for business in the face of changing shopping habits. In these challenging economic times, many of us now opt to shop on-line, rather than commute to the local store to purchase our goods. On-line shopping offers us both convenience to shop from home, without the need for travel, but more importantly provides selection plus the advantage of significant cost savings, available through attractive on-line offers, often not available elsewhere. Traditional retailers are naturally concerned about the future of their business and as a consequence, many of the large retail chains have closed down unprofitable stores, leaving an unprecedented number of high street and shopping center premises vacant. In turn, with the trend in on-line shopping growing in popularity, retail property landlords are also finding it more difficult to attract new tenants.
Footfall is the heart and pulse of the retail trade. Retailers simply cannot exist without our business. Footfall is a critical barometer and KPI (key performance indicator). EPOS (electronic point of sale systems) can only provide sales data but they cannot provide data regarding the lost sales opportunities. Accurate footfall measurement is therefore an essential requirement for better business intelligence and effective store management. Historical footfall data analysis identifies trends in customer shopping patterns and is also used to forecast future levels of business based on historical performance models. Footfall importantly lets retailers benchmark individual stores using standard metrics. Stores with high footfall traffic, but poor sales, can highlight an issue with poor product mix, product pricing, placement or even a potential problem with sales staff. Footfall trend information is used for resource management specifically with regards to staff scheduling.
Store managers can adjust staffing levels based on historical shopping footfall patterns. This can provide an improved in-store customer satisfaction experience with the benefit of reduced costs for the retailer by removing unnecessary extra staff. With accurate footfall measurement, the impact of marketing promotions and special offers can be accurately captured and analyzed. This allows retailers to conduct cost benefit analysis of different marketing media and determine what marketing efforts are most effective in driving extra sales though their stores. Modern footfall systems also offer the ability to record external event information such as weather conditions, local events, public holidays etc.. This raw data combined with sales information provides business intelligence information and allowing the retailer to better what factors affect business. Used correctly, footfall measurement is a very powerful tool that allows retailers to better understand their business, reduce costs and ultimately to be more competitive.
Technical Director with Alpha Vision Design

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