He should know what the sales opportunity is – that is, how many people tend to buy lemonade in that location on a typical day and what people are willing to pay for that frosty cup of lemonade. He should take into account how sales could be impacted on a rainy day verses a hot, dry day. He should be aware of what his competitors are doing too – does that yummy sausage vendor also sell lemonade for instance? Not only is it important to have this knowledge, but it’s also important to be prepared, with the right price, the right product, the right inventory to meet the demand.
This scenario also rings true for the modern retail business, but that’s not all. In addition to having the right answers, today’s retailers are faced with the challenge of staying relevant to evolved shoppers who have unprecedented power over what products to choose and how much to pay for them. Thanks to freely-available information online, they can compare prices, actively reference product information, and make informed buying decisions.
In a hyper competitive landscape, knowing your customer is not enough. Without the ability to find out what’s influencing buying decisions and how to adapt accordingly, retailers are unlikely to stay afloat - let alone be profitable.
It doesn’t have to be this way. As retail gets more organized and data about buyer preferences is more readily available, there is tremendous opportunity for retailers to eliminate the unpredictability and act on insights. By analyzing this data retailers can apply product intelligence to make better decisions on pricing, promotion, demand planning, strategies, and much more.
Product intelligence helps retailers stay better informed about the demand and the competition, so they can make better decisions about how to sell their products. It involves the application of technology to aggregate and analyze data about the products a retailer sells, and what their competitors sell. Taking data from a variety of online and in-store sources, it can inform pricing, merchandising, marketing, and product development decisions. When correctly implemented, it can provide timely, relevant insights into market conditions, competitors’ strategies and tactics, and consumer behavior and sentiment. In simple words, it puts the power back into the retailer’s hands.
According to IDC Retail Insights, product intelligence will inform 80% of the top ten ecommerce retailers’ pricing decisions by 2016, and influence $3.7 trillion of retail spending in the US by 2020.
Learn more – view the recent webinar, How Product Intelligence Boosts Merchandise Performance. In the webinar, featured speakers Greg Girard, Program Director at IDC, and Sudhir Holla, SVP at Ugam, explain how Product Intelligence helps improve the overall merchandising performance.
Mihir Kittur is a Co-founder and Chief Innovation Officer at Ugam. He oversees sales, marketing and innovation and works with leading retailers and brands with insights and analytics solutions around their category decisions to improve business performance.