Deloitte’s 2019 Retail Industry Outlook focuses on navigating disruption in retail. One of the six strategies Deloitte identifies deals with emerging technologies. Their report states:
Ultimately, retailers should figure out how to scale these solutions and embed them into their way of doing business. To leverage the true power of next-generation technologies, retailers should make some significant changes. They should be able to consistently mine the data they collect, transform their operations to deliver on the brand promise, and adapt to the future of work.
The findings of this year’s state of the industry survey reveal that 65% of independent garden centers (IGCs) use a point-of-sale (POS) system for their business. That bodes well for IGCs in light of Deloitte’s stated technology strategy.
There are obvious and immediate benefits to using technology to track inventory, transactions and customers. And many IGCs began using a system to address very clear pains or business challenges. Perhaps you needed a more accurate picture of your sales or profitability. Perhaps you needed product availability information to improve the customer experience.
Once you are using a point-of-sale system effectively, you are collecting data about your business. This article is going to talk about tools and techniques to help you view and understand that data to support your business. Generally, these tools and techniques fall into two major categories: Business Information or Business Intelligence (BI) and Business Analytics (BA). These terms are common language for CFOs and large enterprise operations experts. However, for many IGCs, this is alphabet soup. I will try to simplify these concepts: Business Information is collecting, analyzing and visualizing data to help you know where you are and where you have been in the past. Business Analytics is collecting, analyzing and visualizing data about where you are and where you have been in order to help you predict something about the future.
Business Information or Business Intelligence (BI) is Right Now
Your POS system generates reports. These reports are an example of a low-cost BI tool that you already have available to you. Reports generally tell you what is happening right now, and what has happened in the past about your business. At its core, a report identifies records (e.g. items, customers, or groups of items or customers) and presents specific information about each of those selected records. You use filters or queries to focus in on the specific items you want to see in your report, and then configure the report to show the data that is useful to you.
Most POS users do not utilize the reports available in their system to their fullest potential. Perhaps the best example of this is in the area of inventory performance. Robust POS systems can report on any number of inventory performance metrics.
Of course, there are the obvious metrics such as sales and margin. But other performance metrics such as Inventory Turnover or “turns,” and Gross Margin Return on Investment (GMROI) can give you a much clearer view about how efficiently you are managing your store’s inventory. The Retail Owners Institute® has a number of resources to help retailers understand and utilize inventory metrics such as Turns and GMROI.
Business Analytics (BA) is the Future
Business Analytics starts with BI but adds data aggregation (multiple sources of data feeding into a common collective), algorithms, predictive analysis and machine learning to anticipate or forecast what will happen in the future. There are BA functions within many POS systems. For example, you may have a predictive sales report that looks at historical trends and projects future sales. Robust BA tools that are affordable for the typical IGC may be too far on the horizon to focus on it today. But as technology and data management continue to grow and evolve, BA solutions that are affordable and effective will surface. Having a strong foundation in BI will help you be ready to incorporate BA tools and capabilities as they become commercially viable.
Let’s Get Visual
They say that a picture is worth a thousand words. Most IGCs are used to seeing their data on printed multi-column reports. While these printed reports can be extremely helpful from a BI perspective, having the ability to visualize your data in dynamic images such as charts, graphs and scatter diagrams, can offer you richer insights and analysis of your data. Reports are all about organizing, formatting and summarizing your data. Visualizations are about helping you analyze your data — whether through examination, interpretation or comparison. Visualizations make it easier to recognize patterns and infer causal relationships between what may appear to be unconnected data points. For example, imagine that you are monitoring foot traffic each hour that the store is open (i.e., counting each person who enters and leaves your store). Showing a visual representation of the foot traffic each hour and comparing it with conversions (shoppers who completed a purchase), allows you to interpret certain things about your average shopper, your need for customer service staff at different times of the day, and the effectiveness of your customer service experience. Imagine filtering or overlaying additional data. For example, how much more useful would your foot traffic/conversion data be if we added visual indications of the then-current weather in the region.
Advanced BI tools help to create these visualizations. Tools such as Microsoft Power BI, Tableau and others are designed to help you visually represent and interpret your data. Not only do they allow you to dynamically see your data in ways that your brain is capable of digesting, but they allow you to easily drill down into the data that was used for the visualization. Visualizations are more compelling and engaging than raw data. With the tools available in the marketplace today you can have a real-time sales and operations dashboard that can be accessed from your smart phone, a tablet or a desktop computer.
To learn more, visit rapidgardenpos.com