A better customer experience.
A better way to manage inventory.
A better understanding of your supply chain.
With mounds of data being generated by machines, sensors, and people, every organization is capable of reaching the untapped potential in these areas. We’ll take a look in this post at the three areas that offer benefits for retailers using predictive analytics.
How Predictive Analytics Help With The Customer Experience
One way to architect a better customer experience is to personalize it. Personalization elevates the customer experience, according to one executive quoted in CIO.
Retailers rely on up-to-the-second data to “personalize content for individual consumers—even those who haven’t shopped at their stores or websites very often.”
This allows retailers to offer more relevant recommendations, personalized specials, and promotions.
A prime example comes from the online retailer Dermstore, which saw a 2-percent lift on its business by developing a customer segmentation platform.
Among its many features, the platform uses algorithms to detect when and “which customers are veering off their purchasing tendencies.”
Retailers can use that data to send a nurturing email to those customers to let them know they’re missed. The idea is that the customers will make the purchase from which they strayed.
Manage Inventory With Predictive Analytics
Predictive analytics help maximize stock. As Bernard Marr explains for Forbes, not all stock will wind up being sold to customers. Some will be stolen, defective, mismanaged, or sent back because of errors in inventory management.
Say you order 10 units because that’s what you need. Maybe only 9 units get delivered. Perhaps this is a routine issue, so as you learn through your data, you begin to order 11 units to ensure you’ll receive the 10 you need.
Predictive Analytics Optimizes The Retail Supply Chain
A priority among retailers is an efficient supply chain.
Each step of the supply chain generates data, such as an item’s origin, transit route, and every stop and scan along the way.
By analyzing this data, retailers can predict when an item a consumer purchased may be late, how late, and what the effects of its tardiness are. Knowing this can help retailers communicate with customers about delays rather than keeping them in the dark.
Additionally, predictive analytics also gives retailers the opportunity to adopt predictive maintenance.
Knowing “information about trends, patterns and outliers [of data generated by the supply chain] can improve decisions, drive better operations performance, and save millions of dollars.”
The benefits of implementing retail predictive analytics have enormous implications for all parties. Brands win by creating targeted, relevant messages for and optimizing delivery for customers, and customers win because retailers have created experiences just for them. By implementing a 360-degree predictive analytics platform, you’ll be that much more valuable to your suppliers and - most importantly - your customers.