The Community
What small businesses can learn from the retail giants?
- August 15, 2022
KEY POINTS
- Big retailers are significantly investing in analytics
- Smaller retailers can catch up with some simple data tracking
- Keeping track of local conversations can lead to successful collaborations
- Analytics can help discover appropriate pricing and the right product mix
Investment in data analytics is rising
Retailers doubled down in hiring data analytics specialists, reaching the highest levels this year, according to a GlobalData report. Companies that excel in these areas and invest in them now are thought to be better prepared for the future business landscape and better equipped to deal with unforeseen challenges. Covid, inflation, and supply chain struggles have created a need for a lot of data that help optimize businesses for growth. Although large retailers have larger pockets to invest in analytics, small retailers don’t have to be left behind. Here are some practical ways to use available data to catch up. As a result, inflation is causing consumers to modify their spending, prioritizing essentials like food, back-to-school items, and energy, with little to spend outside of necessary food and supplies and are looking for bargains.Rising Product Costs
Companies, such as Food Lion, are evaluating and diversifying suppliers not only to differentiate, but also to keep shelf prices low, attract prospective brands, and boost customer loyalty. Having a diverse set of suppliers gives you ways to discover new brands and track pricing over time. Use tools like Google sheets to compare pricing and find optimal orders from each.Dynamic Pricing
Gas prices have long leveraged dynamic pricing, but you can use price and cost analytics, and track competitor or online pricing to apply similar strategies for your retail goods and products. Look for peak periods during the day where prices can be lowered or discounts can be given providing an opportunity to increase customer loyalty, minimize food waste, and target price-sensitive customers. Providing food and essential discounts during the slowest periods of the day can drive additional foot traffic and customer loyalty.
Collaborate locally
Keeping a closer ear to your neighborhood will help you find creative ways to collaborate with your local stores, suppliers, and businesses. Wawa capitalized on its signature peach tea and collaborated with a local brewer for a summer hard tea beverage. Krispy Kreme partnered with Good Humor to create summer favorite flavors. Listening to your customers, keeping an eye on local social conversations, such as on Nextdoor or local Facebook groups, and tracking Google Trends can uncover opportunities to maximize your partnerships and delight your customers.
Right-sizing your business
The traditional view of rightsizing is that it is a fancy word for closing stores due to budget reasons. However we can learn from Albertsons and other retailers, the approach should be centered more on optimization. The first step is to examine whether the store products are optimized. Is there one least profitable product that takes away from higher profitable ones? Are there any gaps that could present interesting opportunities? Stores can think about reaching the right product mix and their space more effectively. Sometimes this data is hidden in the store sales, so analytics tools can help uncover these types of insights to help you right-size your business.