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Barriers To BI In Retail


Today, most retail stores operate on razor thin margins. The cost of a wrong decision about trends and customer needs can not only significant impact profits but may tip a business over the point of viability. For this reason, retail probably more than any other industry sector needs to ensure that decisions are logic based, rather than emotion based.

Stripping emotions out of consumer selling may seem wrong on many levels, considering that buying decisions are emotive based [a billion dollar advertising industry relies on this fact]. However, how decisions are made on the buying side, do not always equate to the selling side of the equation.

The need for retail intelligence is not new to retailers -it has been many years since point-of-sale [POS] technology evolved from managing transactions alone, to one that also includes stock management, promotion management and merchandising.

The collection of data for these functions has been a critical step in the path towards integrating BI into retail management systems.

This collection and use of information is already used to increase sales and promote efficiencies. However, whilst the collection of vast amounts of data has been mastered, the fundamental need to use that data as a basis of logical decision making has not quite been captured.

Many retail organizations have invested significant capital to implement unified, enterprise-wide platforms for their operational systems - they have often neglected to provide an equivalent unified platform for their business intelligence [BI] solutions.

The main barriers include:

  • Access to information for strategic planning and deployment of resources beyond the current quarter
  • Lack an integrated BI approach enabling data to be extracted from disparate information systems, and combine it in a centralized, easy-to-access repository.
  • Lack of business rules supporting reporting, analysis and collaboration

Whilst most retail management systems adequately provide for historical reporting, few support future insights, leaving retailers to rely on basic extrapolation of past performance and guesswork.

Next: Retail IT Systems

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