In the current age of Information technology, the
retail and wholesale industries have never been more fragmented. From discount
warehouse clubs to upscale specialty stores, corner convenience chains to mega
e-commerce sites, buyers are better informed, less loyal, and highly cautious
about discretionary spending. Organizations are always striving to
balance product, price and service sensitivities, while protecting margins and
trying to ensure inventory availability while maintaining reduced carrying
costs. Now more than ever information must be leveraged in new ways to gain
competitive advantage and renew stability in these uncertain times. And that’s
where BI plays a huge part.
Retail Industry Overview:
Increasing competitors: There has been an explosion of
products, markets and stores. There is also always the constantly looming
threat of new entrants, who look to take away the market share.
Increasing Customer Expectations: There is the ever increasing demand
from customers that have to be met. Innovation in technology has brought the
services and the products to the fingertips of the customers.
3.
Customer/Supplier bargaining power: The retail industry has to often deal
with the pressure of the customers or suppliers influencing the pricing decisions
of products.
Retail
Industries use the following BI framework for establishing and integrating
their Hardware and Software components.
Retail
Industries use the following BI framework for establishing and integrating
their Hardware and Software components.
The source systems capture the data from
the daily transactions and store them. The ETL
layer is responsible for data extraction, cleansing, staging, transformation
and loading. The Data Warehouse stores
the data depending on the needs of the business. The BI Layer is responsible for the number crunching by applying
business logic and generates relevant metrics.
Evolution of BI in Retail Industry
The
evolution of BI in the retail industry is staggering, from static reports to
dynamic dashboards. Insights can be given into data with root cause analysis to
determine the functionality and the effectiveness of decision making. These
advancements in BI with respect to retail industry has helped in providing the
following advantages,
Aligning the business with client
needs: Identifying
opportunities and enhancing decision making.
Gaining competitive advantage: Analyzing the data and generating
reports to increase business functionality and effectiveness.
Resource allocation optimizations: The technical and the financial data
needs to be integrated with the operational data in order to maximize the
resource allocation and enhance productivity.
In the
retail industry, using Business Intelligence (BI) is an obvious choice. But before
that, one must understand buying behavior, customer requirements, exact price
points for products, shipping and inventory timing and changing trends. Getting
the right product on the store shelves at the right time, for the right price
is the essence and what retail is all about.
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