Why retailers should invest in Business Intelligence (BI) solutions
Business Intelligence (BI) solutions can cover a multitude of areas within the organization. At Professional Advantage we are particularly interested in helping retailers better manage their Inventory, Purchasing, Sales and Financials through BI. Below are 21 business reasons that highlight the value of bringing business intelligence into the retailers’ realm.
WHY is inventory management so important?
By managing the right inventory levels, a retailer will:
a) Free up working capital, that can be used elsewhere in the business or earn interest/retire debt
b) Increase reaction time to purchase and acquire more stock which is fast-moving
c) Decrease the storage space needed to hold surplus stock
d) Provide more scope to extend or reduce the variety of product lines offered
e) Reduce costs associated with transport, handling, storage and waste
f) Increase sales volume as needed products will be on-hand (reduce stock-outs or increasing sales fill-rates)
g) Optimise shelf space to provide more space to higher selling items versus slower moving items (adjusting shelf space allocation)
h) Increase Gross Profit margins
WHY is control/automation of the purchase process so important?
a) Avoid over ordering stock which is slow moving
b) Ability to hold more stock of fast moving items
c) Reduce maverick buying (buying items on a whim)
d) Reduce the time involved in developing purchase orders
e) Benefit from bulk or consolidated ordering: price and logistics
f) Lean supply chain: move to using the Supplier as your warehouse by acquiring goods only when needed
WHY is management awareness so important?
a) Increased knowledge leads to informed decision making
b) Understanding peaks and troughs can lead to better staffing decisions: when to add/reduce staff
c) Increases vigilance of theft and revenue leakage
d) Intimacy with business leads to better buying and selling techniques
e) Allows management to focus on higher value or margin goods to increase sales and margin
f) Increased knowledge about suppliers allows management to work more closely with suppliers to improve business
g) Reduces times spent on tedious day to day problems and more on long range or business growth decisions
There are many other aspects of a retailers operation which are important. However, the purpose of specifically highlighting these is to illustrate the role that Business Intelligence can play. Gaining a better understanding, and hence management of these parts of the business can drive a material benefit to the bottom line.
Professional Advantage has developed Retail Analytics & Merchandise Planning for Microsoft Dynamics® RMS, which has helped retailers unlock many insights that are held within an organization’s databases.