Top 4 advantages of business intelligence in the retail industry

Top 4 advantages of business intelligence in the retail industry

It’s no secret that e-commerce has cut into the growth of brick and mortar retail sales. E-commerce giants like Amazon have experienced astronomical growth over the last decade and brick and mortar giants like Walmart and Target are investing heavily in their online presence. Online retail sales were up 15.2% in Q2 2018 compared to the same period last year, while total retail sales were up only 5.7% (Source: Census.gov). Couple that with the alarming number of mall or major retail outlets that have closed over the past year, and you begin to understand why some are painting a bleak picture for brick and mortar retail.

However, the narrative that brick and mortar retail is dying is simply not backed by statistics or objective empirical evidence. E-commerce accounts for less than 10% of all retail sales, and Forbes calls out that the number is expected to remain under 20% until at least 2022. Additionally, retail giants like Walmart and Target are doubling down on their investments in brick and mortar and the poster child for e-commerce, Amazon, is investing heavily in brick and mortar with acquisitions like the Whole Foods purchase and their own Amazon 4-Star, Amazon Pop-Up, and Amazon Books physical retail locations.

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What does all this mean? Physical retail isn’t going away, it’s evolving. Retail consumers are price sensitive, short on time, and convenience driven, and this is what has allowed e-commerce to capture so much of their business. By leveraging analytics and business intelligence (BI), e-commerce retailers are able to optimize their product offerings, price points, and promotions to target consumers on a very personalized level. While it is true that retailers relying on traditional sales, marketing, and operational tools and strategies are likely to get left behind, BI can enable brick and mortar retailers to not only survive, but thrive in this new retail ecosystem. By bringing business intelligence into the brick and mortar space, retailers can reap many of the same analytical benefits their online counterparts do, modernize their operations to meet the demands of the modern consumer, and offer an in-store experience that can outstrip anything currently available online.

In this piece, we’ll dive into 4 specific advantages BI can create in the retail industry and explain how BI can drive retail business to new heights via a data-driven approach to strategy and customer service.

1. Enhanced customer experience

The fundamental advantage brick and mortar retail has over online shopping is person- to- person interaction. BI helps retailers lean into that and make sure that the look and feel of the store, as well as the interactions with retail staff, are strategically designed to enhance the customer experience. For example, Nexshop Behavior Sensing is capable of capturing and analyzing data of customers in a store, enabling management to allocate staff in a way that is conducive to “nudging” a customer into making a purchase decision or understand the effectiveness of a given promotion or marketing initiative. All this comes together to lead to an enhanced customer experience that can be the difference between leaving a customer satisfied with their trip or regretting they ever left the comfort of their couch.

2. Personalization & Engagement

The traditional in-store retail marketing paradigm inherently paints with broad strokes. Promotions and signage may be targeted to a given demographic or target market, but drilling down to the individual level is near-impossible using traditional marketing tools. When organizations do attempt to make targeted efforts in their in-store marketing it is often using decisions based on the gut feelings of staff and management. Simply put, these subjective efforts aren’t nearly as effective as data-driven approaches made possible by BI.

For example, BI data can empower sales staff with knowledge of customers’ purchase history, shopping habits, and recommend specific promotions to help sales reps offer targeted advice and recommendations at the right time. Additionally, interactive in-store technologies powered by BI can help steer customers towards a purchase in a “self-serve” manner that is easy to scale but also effective in getting the customer the information they need in a timely fashion. Tools like Nexshop Digital Experience can deliver content based on the demographics of individuals that walk by digital signage and displays.

To further contextualize this point, consider a situation where a group of young people approach a digital ad or kiosk. If there are more young men than young women in the group, the rule-based engine that drives BI enabled digital signage and kiosks can display an ad strategically designed to attract and engage young men, or do the opposite if the next group to walk by has a different demographic makeup. This can have a profound impact on engagement.

Additionally, BI enables funnel analysis with a level of granularity that would otherwise be impossible. This allows organizations to iterate and improve their engagement efforts at a velocity that far exceeds traditional approaches to brick and mortar marketing techniques.

3. Reduced operational expenses and enhanced operational efficiencies

BI makes data-driven, efficient operations achievable in ways never before possible. From a staffing standpoint, BI can help you understand how to staff your retail location to match the ebb and flow of traffic in the store ensuring you have enough staff to keep customers happy, but aren’t overstaffing and being wasteful due to inaccurate, subjective predictions.

The data-driven, analytical approach BI makes possible from a marketing and promotions standpoint help ensure you get the best ROI on each in-store marketing effort. By understanding how customers respond to a given promotion, you are able to better allocate resources and marketing funds. Referring back to the Nexshop Digital Experience example, imagine the difficulty of tailoring a traditional ad, even using digital signage, to a given customer demographic based on foot traffic in real time. It simply would not be possible. With BI and modern technologies, not only is it possible, you can measure effectiveness as you go and make tweaks based on analytics as opposed to gut feelings.

4. Optimize floor plans and product placement

One of the biggest drivers of sales in retail is creating a floor plan that is conducive to sales. Floor space is limited and maximizing revenue per square foot is vital to turning a profit. BI takes the guesswork out of getting your floor plan right. Using insights from BI, store managers can not only tell where customers are spending most of their time in the store (by tracking “dwell time”) but also identify slow-moving product and displays that are not attracting much customer attention. This allows managers to not only create displays and sales to help push slow moving product, but also to plan a floor layout to better drive traffic to the right places. For an example of the possibilities, check out this short video detailing how Nexshop can help identify “hot spots” on the sales floor and help managers switch up a floor plan to better engage customers, push slow moving product faster, and drive sales.


Brick and mortar retail isn’t going anywhere anytime soon. It’s evolving and beginning to leverage the tools and techniques e-commerce has benefited from in recent years. By leveraging BI, organizations can make their brick and mortar retail experience highly personalized, data-driven, customer friendly, and engaging while also improving efficiency in operations. As BI continues to mature in the retail space, we will see continued growth and adaptation in the market, likely bringing the level of intelligence in brick and mortar retail on par with, or exceeding that found online. In the years to come, wearables for sales staff may enable them to react to and engage with customers based on data inputs from nearby beacons and sensors. Whatever the future may hold, it is clear that retailers that embrace a data-driven, BI powered approach to retail are well positioned to compete moving forward.

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VP, Digital Innovation Solutions, Diane Carlson
VP, Digital Innovation Solutions, Diane Carlson
Samsung SDS America