Throughout the history of retail, highly knowledgeable merchants have scanned their sales figures and then drawn predictions from their guts’ in order to predict future trends and make the most of them. This is the ‘art of retail’ and has meant the difference between success and failure in the dynamic and competitive world of retail.
Recently however, this art has been challenged by the science of predictive analytics. Results are king in the retail space, and comparative studies are rife in this battle of art and science, but are retailers taking these results seriously enough or are they stuck in their old ways?
“Executives often fail to realize the potential of big-data analytics, worrying about increased IT spending,” according to Ernst & Young. “Not only that, but within stores, managers hesitate to defer judgment to numbers spat out by a computer.”
Both the artistic gut of the merchant and the statistical brain of the scientist use data, but in different ways and on entirely different levels. There is only so much data the merchant can take in when making a prediction, while the scientist is more inclined to give that responsibility to a comprehensively designed computer program.
Be it gut or brain, such analysis forms the base of almost every decision. Supply chain options, inventory levels, store floor layout, merchandising, marketing, even recruitment and training can be heavily influenced by predicted trends. Both emotion and calculation have a strong case to make for their predictive capabilities in this dynamic industry.
But results are king in the retail space and those results have been really compelling. “90% of the time, analytics won,” said a major retailer after six-month study comparing analytics predictions against those using traditional merchant approach.
Market leading analytics platforms such as Mojix’s ViZix are enabling data scientists to change the way retail trends are predicted and rewarding forward-thinking retailers at their bottom line. While analytics may remove some of the emotion from predictive analysis, perhaps the modern ‘art of retail’ uses the canvas of data analytics.