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How can data analytics increase retail store sales?

Data science is strongly believed to be the solution to overcome current challenges facing retail sector. On job sites, the number of postings and searches for data scientist positions has increased steadily year-on-year since 2013 and it’s expected to continue to rise, with many retailers turning to these number crunchers as a way of making big data work for them.

But how do data scientists actually help? How can the data businesses routinely collect be put to effective use? And how can organisations use the information to drive retail sales? Here we take a look at a few ways big data can be best used to increase retail sales

The benefits of data science in retail

Data science in retail can assist businesses grow their sales in a number of different ways by ensuring that they’re making intelligent decisions based on hard evidence. Big data allows businesses to use past sales to look for trends, target specific customers and geographical areas with promotions and offers, create customer profiles, manage inventory, reduce shipping expenses and appraise the performance of their staff. While all of these factors affect profit in one way or another, here our primary focus is on understanding   the way data can be used to drive retail sales. For this reason, we’re going to focus on three main areas – customer attraction, customer retention and real time point of sale data.

Long term analytics

When we talk about long term analytics in this context, we mean how we can use data to create more accurate customer profiles which make it possible to predict their lifetime value to the business. This allows organisations to compare the cost of acquiring a customer (through marketing, exclusive offers etc.) with the value they’re likely to contribute to the company in the long run. Likewise, the data can be used to work out which customer groups are most valuable to a business, allowing them to focus its customer retention strategies on these important groups.

Point of Sale data

Point of Sale (POS) data is a vital part of any drive to increase retail sales. It can be used in a variety of interesting and profitable ways, such as building accurate customer profiles, monitoring staff sales, checking for sales trends or changes in spending patterns, as well as measuring customer satisfaction levels. The fact that POS software keeps track of every single transaction going through the store makes it ideally suited as a data collection point and the information it gathers, when interpreted intelligently, can be used to boost sales.

In a world where it’s possible to access data on nearly all aspects of life, finding ways to utilise the information is crucial. Analytics and real-time sales data offer unique insights into customers and their behaviour, facilitating effective and targeted marketing practices. This often results in increased number of sales.
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