Real Time Analytics in Retail Industry
India’s retail market is expected to double to $1+ trillion USD by 2020 from $600 billion USD in 2015, driven by income growth, urbanization and attitudinal shifts. While the overall retail market is expected at grow at 11% CAGR in this period, modern trade (hypermarkets, supermarkets), currently at $60 billion USD is expected to triple (reach $180 billion USD by 2020) while growing at 25% CAGR.
It is expected that the next major driver of this retail market, especially beneficial for modern trade segment, is going to be “Real time business intelligence”. What is this new technology & how is it beneficial?
Real time analytics refers to the use of data and related resources as soon as the data enters the system (typically within 60 seconds).
Benefits of Real Time Analytics (RTA)
RTA shall impact top line & bottom line for retail organizations:
• Additional revenue due to:
- Improved service levels leading to higher conversion rate
- Better sales insights, customer trends (competitive offerings)
• Cost control due to:
- Instant/ very early detection of operational errors within the organization
How RTA is beneficial for Retail Supply Chains
Retail supply chains typically face the problem of lack of end-to-end visibility across the complex supply chain & demand fluctuations. A streaming data analytics solution can not only provide a retailer with an up-to-the-minute and comprehensive view of all facets of the supply chain, but it can also let them collect, correlate, analyze and act on data from diverse sources and systems in real-time.
Thus, the retailers can better identify and fix problems in real-time before the customer is impacted.
TESCO, a grocery retail giant in UK, has been a pioneer in technology. Some challenges it faced were:
• Lack of understanding of changing customer behavior
• High food wastage across the stores
It looked at RTA as a possible solution given the growing amount of customer, operational & external data available. Two focus areas for RTA implementation were:
1. Sales forecasting: Using analytics and clustering, it found the right combination of products to procure, make & stock, thus reducing/ eliminating lost sales & unsold inventory.
2. Sensor data usage: One example is monitoring the temperature of fridges/ freezers to avoid equipment failure and thus ensure food preservation. Here, predictive algorithms are used to find out when maintenance is required.
Such benefits not only assisted TESCO make more revenues & control costs. In effect, it consolidated the firm’s position as a market leader.
In an ever rapidly changing business world, it is critical for leading organizations to stay ahead of the competitors. RTA, in its initial stages, is shaping up to be the buzzword for the next few years. Retail supply chains, especially in India, are going to be highly benefited from the adoption of such new technologies.
CGN Global, has vast experience in data analytics projects for major clients across various sectors. Taking this one step further, it has also developed & deployed its own proprietary disruptive executive operating system which rapidly interconnects the extended enterprise for visual thinking, advanced reasoning, & collaboration.
Boston Consulting Group and Retailers Association of India report titled Retail 2020: Retrospect, Reinvent, Rewrite.
Something we found interesting
"Here is an interesting video on how real time analytics is used to optimize customer data:"