| To combat Wal-Mart's dominance, grocery chains are | | | | long-term view of their customers' behavior. From the |
| starting to merge, which could pose a problem for IT | | | | Aberdeen report (which may be downloaded for free |
| departments. According to a report from the IHL | | | | through the end of March) : |
| Consulting Group, grocery chains are struggling with | | | | Best-in-Class retailers are almost twice as likely to |
| the lackluster performance of many loyalty programs | | | | focus efforts on improving the lifetime value of their |
| due to the amount of legacy hardware and software | | | | customers as a business intelligence strategy. This |
| at the store level. The report says point-of-sale | | | | involves understanding customer profitability, the offers |
| hardware is a good area for grocery IT spending. | | | | and incentives that draw customers back for repeat |
| Read this article on how business intelligence could help | | | | business, and the ability to take advantage of |
| in the way customer data is viewed. | | | | opportunities for cross-selling and up-selling customers |
| Retail is an industry where the old 80/20 rule certainly | | | | on subsequent visits. |
| applies. Many retailers make most of their money from | | | | British retail chain Sainsbury's is one company that |
| a relatively small group of core customers. Loyalty | | | | appears to want to move in a more proactive |
| programs were created as a way to make those | | | | direction. As detailed in a Computerworld UK article, it is |
| customers feel more special - and get them to spend | | | | undertaking a multi-stage BI initiative with partner the |
| more money. | | | | Loyalty Management Group. |
| Yet few retailers use such programs to their | | | | In phase one, Sainsbury's will analyze sales data from |
| advantage, says Greg Buzek, president of the IHL | | | | its stores to monitor the performance of selected |
| Consulting Group, in an August eWEEK article. Buzek | | | | brands and determine when and where sales are |
| says most stores simply offer customers discounts on | | | | strongest. Analysis will also yield information on which |
| products they already purchase instead of trying to | | | | products consumers purchase together and, if sales |
| analyze patterns in their buying behavior to find out | | | | drop, which products shoppers buy instead. The |
| new ways to appeal to them. | | | | second phase will offer information on how promotions |
| A desire to gain greater visibility into their customers' | | | | affect sales and how well new products sell in stores. |
| behavior is leading retailers to adopt business | | | | A proposed third phase would analyze data to |
| intelligence. Nearly 70 percent of retailers recently | | | | determine which kinds of media are most effective for |
| surveyed by the Aberdeen Group already use BI tools | | | | sales promotions. |
| while another 26 percent plan to invest in BI. The ability | | | | According to LMG’s development and support |
| to react quickly to changes in customer demand was | | | | manager, the system can get quite granular with data |
| the number-one reason for adopting BI cited by survey | | | | from members of Sainsbury’s loyalty program. |
| respondents, according to a article about the research. | | | | He says: |
| Compared to their more average peers, the | | | | We’d be able to show information like: women |
| companies Aberdeen Group identifies as best-in-class | | | | aged 18-30 in a certain part of the country are buying |
| tend to use BI tools and technologies to obtain a more | | | | a lot of Diet Cola. |