Retail marketing giant Blueprint is launching a retail analysis business in Australia, called Retail Insights, after spotting a gap in the market for more advanced and timely analysis of data.
After striking a global alliance with Walmart, Retail Insights will open in the first quarter of next year and has already had preliminary discussions with some of Australia’s biggest retailers.
Blueprint chief executive Craig Hart told SmartCompany that Australian retailers lagged behind other countries in terms of access to data and the analysis of it.
Get business news first
Sign up to SmartCompany’s daily newsletter
“The United Kingdom is more sophisticated because it is a larger market and more competitive. They have a view about how they use all the available data from all of their stores to drive a view in what they can be doing,” he says.
“Because it is so competitive, an item being out of stock for a day or two can lead to a high amount of lost sales. When you have the customer in store you can’t afford not to meet their expectations by failing to have an item in stock they want to buy.”
Retail Insight takes eftpos data and then uses sophisticated algorithms to provided analysis and data about what retailers should be stocking.
“I think it’s a matter of understanding what your data tells you. Data has been available in Australia for a long time so it’s a question of whether it has been measured for benefit,” Hart says.
“It is what you do with it which is the issue; we want to assist the process to take more actionable insights.”
Hart says the four key areas where Australian retailers should use data are availability, category optimisation, seasonality, and cannibalisation within a category.
Hart says the consumer expectations are greater than they have ever been; which is why it is so important for retailers to have all products in stock.
“Most consumers make decisions about what they will purchase when they are in the store, the impulse buy is a good thing when the stock is there and a bad thing when it is not,” he says.
“It is a common thing for large and small retailers. Consumers are demanding, and if they walk into a store and experience an unsatisfactory moment they will shop somewhere else.”
2. Category optimisation
Category optimisation involves looking at what is the rate of sale by a particular category and whether is it performing as well as other categories within a store.
“What we can tell by the rate of sale in a category is whether it is best set up to deal with customer demand and to create customer demand,” Hart says.
Seasonality and even the weather can drive different propensities to the sale of different products, according to Hart.
“It’s an obvious thing but when analysed it can be a good insight on how to meet consumer demand,” he says.
4. Category cannibalisation
Hart warns retailers need to analyse data in order to identify instances of category cannibalisation.
“A product within a category may well lead to more sales, but you need to look at is it ranged within the category in the right way as not to detract from other products, as the aim is for the overall growth of the category as opposed to growth in one product.”