The Art and Science of Advanced Retail Analytics
Most business skills in retail are teachable—purchasing, supply chain management and store operations. Some require a blend of art and science, like marketing and merchandising. And then there is one business skill that requires a solid grounding in hard science and leading-edge technology. This sophisticated skill is advanced analytics, which is governed by the complex laws of query language and algorithms.
Retail executives who possess skills in advanced analytics are neither craftsmen nor artists, although they include elements of both. Instead they are scientists, who, in the last few years, have emerged as essential weapons in a retailer's battle to outperform competitors and achieve deeper levels of customer satisfaction.
It is these executives, both analytic specialists and line-of-business executives who increasingly depend on advanced analytics, who are the focal point for the upcoming Retail and Consumer Goods Analytics Summit (RCAS), which will take place in Chicago at the Drake Hotel May 4-6.
RCAS fills an important gap in retail between where most retail organizations are today in analytic readiness and where they need to go. This is a highly relevant topic because many retailers are lagging in their analytic transformations—60 percent of retailers say they are still on the lowest step of the analytic maturity model, according to research from RIS News. Here are the four steps as defined by RIS:
- The first step is reactive, which means the retailer knows what has happened to sales and margins, for example, by analyzing historical data.
- The second step is proactive, which means the retailer knows who (which customer segment) drove performance.
- The third step is predictive, which means the retailer knows what will happen next when a strategy is executed.
- The fourth step is prescriptive, which means the retailer knows how to accurately create and execute new opportunities that have no historical precedent.
Retailers who attend the RCAS conference will learn ways to better leverage advanced analytics and take decisive action to deliver results. They will gain insights into techniques, technologies and best practices in marketing, merchandising, supply chain optimization, big data management, natural language processing, machine learning and new product development.
The list of expert speakers at RCAS includes: Christopher Surdak, author of "Data Crush: How the Information Tidal Wave is Driving New Business Opportunities"; Gary Kearns, group executive information services for MasterCard; Kyle Wierenga, manager of advanced analytics for Costco; and Gaurav Pant, SVP of research for EKN Research.
Although driven by powerful competitive and marketplace pressures, many retailers are struggling to make progress in their analytics transformations. According to RIS research, the top problem they encounter is integrating data from multiple sources (55 percent), followed by ensuring data quality from multiple sources (43 percent).
Interestingly, the next three inhibitors are linked by the fact that skilled quants and data scientists are difficult to find and a lack of faith in current analytic capabilities. These three linked inhibitors are: lack of staff and management commitment to improving analytic expertise (40 percent), interpreting results (38 percent), and finding/hiring analytic talent (34 percent).
Since these internal problems will not disappear easily, one alternative is to promote and train analytic experts from within—one of the missions of the RCAS conference.
Joe Skorupa is editorial director of RIS News, a sister publication of Retail Leader.