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Retailers can always benefit from top insights into how conversion rates are panning out, and a deeper look into how their customers are feeling about that retailer’s marketing efforts or specific product placement. In the olden days, this was done through the usage of market research feedback servers and just plain old guessing, but now with the help of Artificial Intelligence and Predictive Maintenance, retail executives are given an inside scoop into what’s working, what’s not, and where to go from there. Predictive analytics is a predictive method used by retailers to brush up upon historical data to forecast anticipated revenue growth, as a result of changes in customer behavior and leading industry trends. By keeping tuned into the insights captured throughout the process of predictive analyses, retailers are able to stay ahead of the competition and lead by example. Predictive Maintenance, in particular, seeks to anticipate incidents and not necessarily in a planned manner, but rather through monitoring surrounding assets at play.
Benefits of the Advanced Innovation
Think about the typical day that a big box hardware store might undergo. They are consistently producing large amount of inventory for their customer base to purchase, and have to ultimately filter through the infinite backrooms of stock to ensure that every SKU number syncs up, and they have what’s listed on their e-commerce site, on-site as well. Predictive analytics can help retail shops of all sizes to predict and forecast sales trends and surges. In creating retail forecasts, analysts will consider a product’s price, marketing, and promotions to develop a plan for projected consumer reactions at the point of sale. Accurate forecasts that meet the forthcoming consumption demands of customers will help retail business owners and management to maximize and extend profits over the long term. Maintaining and controlling a sufficient but moderate inventory that meets the need without being excessive also adds to the long-term profits in the retail industry.
Especially during the early stages of the pandemic, when retailers were struggling to keep inventory from flying off their shelves as consumers were hoarding toilet paper and survival essentials, some predictive methods could have direly come in hand to provide aide and relief in the best way possible. Periods of economic hardship have occurred before, including stock market crashes and even the last time a big virus like this impacted the United States back in the early 1900s. Such historical data from these events can help to provide a glimpse into consumer behavior, allowing retailers to evaluate temporarily or permanently discontinuing product lines, weigh alternative solutions for supply chain challenges, and acquire an understanding of how to safely reopen and operate their retail locations.
Common Use Cases
Properly done through online shops and stores, predictive analytics can help to filter through a user’s purchase history and recommend similar or accommodating products that that shopper might enjoy through Product Recommendations! A lot of the time, this suggestion will come in the form of an email or a desktop notification for those who’ve placed items in their shopping cart, but have yet to follow through with completing the purchase.
Price reassessment is another option that is brought to the table when it comes to how Predictive Analytics can impact the world of retail. Based on the demand for a product put into place, based on the season it’s on sale for, or the overwhelming crowd reaction, predictive tendencies can highlight those upticks and alter prices if need. Just think of a hotel who raises their prices on the weekend, due to the heightened need for a room after a few days of travel.
Predictive analytics in e-commerce works well for both physical and online retail presences. On an in-person account of things, managers can browse through video surveillance footage to track down how people are walking throughout their store. Are they simply idling around with no direction in sight, or are they on a mission to collect the items they originally came for? Looking deeper into this level of insight, managers are able to redirect the goals of their marketing campaigns and even more so, this form of analyses can replenish the stock, or rather put in the order for more stock, so that their human co-worker doesn’t have to rifle through receiving to track down the specific item number.
The blend of machine learning and artificial intelligence can supply the process of employing predictive analytics with a means of ensuring better accuracy and insightful data to those in search of it. Additionally, predictive analytics is especially useful for managers are interested in understanding where issues in their supply chain are occurring, in the event that they are occurring. During a global pandemic, where absolutely nobody could have prepared for this, this level of advanced technology can really benefit people, especially those who are operating in the retail industry.