Retail Slump Signals Greater Need For Business Intelligence

A headline item [Recession Shows Its Face – Retail Sales Fall] in todays New Zealand Herald announces “Retail sales fell a seasonally and inflation-adjusted 1.5 per cent in the June quarter, providing further strong indications that New Zealand is in a recession”. Another headline promising doom and gloom across the nation.

This state is not unique to retailers in New Zealand. Retail sales are falling across the globe. This typically drives retailers into one of two responses – contract their expenses and ride out the downturn, praying they are still in existence when the recessionary forces abate, or invest more to drive increased revenue.

Business intelligence offers a third option that provides benefit way beyond the so-called recession. BI helps businesses gain visibility of where their most profitable products and sales channels exist. This means that they can focus on these areas, and make more of any limitations in marketing budgets.

Standard reporting already used by retailers provides visibility into where higher profits are being made, in terms of both product and location, but they do not provide why. Analytics allows retailers to drill down and across sales performance reports and run queries to identify exactly what is driving this higher level of profitability. Knowing why provides the information needed to make decisions around investment to drive continued performance.

Many retailers already have good data from Point-of-Sale [POS] and Stock Management systems. It is not a great jump to add a business intelligence layer.

It’s not a matter of not being able to afford business intelligence, it’s a matter of not being able to afford not having business intelligence.

Retailers will find detailed insight into how business intelligence is used in the retail industry in my soon to be launched [September 2008] book “The Logical Organization: A strategic guide to driving corporate performance using business intelligence” The book will be available on this site and on

Written by: Gail La Grouw

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