The Marketer’s Guide to Retail Merchandising Analytics

If it seems like the world of retail merchandising is evolving at a pace difficult to keep up with, you’re not alone. And while new digital solutions arise almost daily, the nearly endless array of tools to optimize your brand presents its own challenge — sorting through and making sense of, the vast amount of data these tools yield. 

Right-for-you retail merchandising analytics will help you leverage that data better, smarter and faster. 

But what are retail analytics, and how can you create a hand-in-hand relationship between them and your merchandising strategies? Keep reading for a quick and easy guide that answers these questions and more. 

What Are Retail Analytics?

Retail analytics embrace the entirety of data your retail brand needs in order to understand the multifaceted aspects of your digital and physical business. These include target marketing, customer behavior, product management and more. 

With the right analytics at your fingertips, you can leverage the biggest current trends in retail marketing, including the demand for increased customer personalization and the need for an on-brand and consistent omnichannel experience. 

Analytics are what help you pull it all together in a way that makes sense not just for your bottom line but for your brand as well.

What is Retail Merchandising? 

These days the best way to define retail merchandising is to say it’s all about managing the vibe around your brand. Customer experience in-store and online will make or break your brand, and retail merchandising encompasses all the many ways retailers deliver an experience that drives your brand to success. Think of analytics as upper-level evaluation and strategy, and merchandising as on the ground application.

What are the Core Types of Retail Analytics?

Making sense of your data and how it affects your merchandising isn’t easy. The right approach to analytics will vary by brand, and chances are what works best for you will be a combination of different types of analytics. Below are the core types of both traditional and modern retail analytics.

Traditional

These types of analytics aren’t new to the world of retail merchandising. Analyzing and understanding how your brand works – and how it doesn’t – have always been important elements of a successful retail brand. 

• Descriptive Analytics These are backward-looking analytics, evaluating data from past campaigns, quarters, and other sources of data to extract a more diagnostic-oriented analysis. Running a descriptive analysis yields a high amount of data, to which you can apply other types of analytics to help make sense of exactly what that data means.

• Diagnostic Analytics Another past performance-measuring type of analytics, diagnostics add depth and context to data by factoring in the systems and strategies involved in your retail merchandising. If descriptive looks squarely at the data, diagnostic searches out the cause and effect connections inside that data.

• Predictive Analytics This type of traditional analytics takes both past and current data and uses it to make predictions about future outcomes. It does so by utilizing statistics, various modeling methods, machine learning and AI, among other techniques. Predictive analytics take what you know and use it to make informed merchandising and marketing decisions for the future.

• Prescriptive Analytics As diagnostic analytics are the natural next step from descriptive, so prescriptive follows predictive by giving you context to future-oriented data decisions. Understanding why certain outcomes are being predicted allows you to make the most informed decisions possible. Furthermore, prescriptive analytics can be run continuously, letting you make real time decisions with the most up to date information at hand. 

Modern

 With the rise of omnichannel marketing and an only-increasing demand for customer personalization, new types of analytics have emerged to keep pace with these very modern demands. Below are some of the newest and most popular analytics to incorporate into your merchandising strategy. 

• In-Store Analytics There are any number of ways to measure the in-house performance of your merchandising. In-store analytics help you track everything from conversion rates to foot traffic to employee productivity and efficiency, and beyond. In short, almost everything that happens in your retail stores has a measured impact on your bottom line, as well as your brand, and in-store analytics is one way to keep track of what’s working and what’s not.

• Customer Analytics While in-store analytics take a broad, overarching view of your entire retail space, customer analytics focus specifically on customer behaviors and purchasing patterns (both in person and online). Who spends what and when are incredibly useful when it comes to personalizing your merchandising experience to your customers’ needs and wants.

• Merchandise Analytics These analytics take a close look at the products your customers prefer, and when they’re most often purchasing them. You can also break down your analysis further to look at what types of products are being purchased, tailoring your analytics to look at size, material and other merchandise characteristics. Stocking smarter saves you from buying products you probably just won’t sell.

• Inventory Analytics Pairing well with merchandise analytics, inventory analytics are a key way to optimize your stock, helping you avoid unnecessary surplus or, on the other hand, running out of in-demand items. Additionally, inventory analytics help you find complementary products to previous customer purchases, which in turn lead to helping you create more personalized and useful ads, emails and in-store signage.

• Web/eCommerce Analytics Seamlessly integrate your in store and online retail brand experience by incorporating web and ecommerce analytics. Collect and analyze data on customer behavior online, tailoring your website, online store and even your social media to real time customer needs and demands. Online analytics offer key insights into the success, or lack thereof, for your marketing retail campaigns as well. 

How do Analytics and Merchandising Tie Together? 

Merchandising encompasses everything from inventory management to how much shelf space to allot per product, to eCommerce listings management and so much more. Analytics are crucial to understanding just how effective every single one of those merchandising efforts are, as well as giving you keen insight into how to make them even more effective. 

Analytics measure the results of your merchandising. And with the wide variety of analytics available to you, every brand can tailor their measurements specifically to their individual businesses. 

Why are Retail Merchandising Analytics Important?

Your success can hinge on how well you integrate analytics into your merchandising. 

Why? Because the retail industry is shifting, and merchandising continues to evolve and expand to include the now necessary integration of analytics and other technology solutions. With the rise of both omnichannel marketing and the demand for increasing personalization, retailers are left trying to figure out how to take their brands into the future. 

The process of successfully integrating the right-for-you analytics isn’t without its challenges. Many retailers struggle to understand how to create a smooth brand experience online and in person, while others focus too much on backward-looking analytics and fail to incorporate those that will help them navigate a market where their web and mobile presence are just as important as their store spaces. 

Above all the biggest challenge for many retailers trying to tie analytics and merchandising together is figuring out what types of analytics they need, why they need them and how to put them to use in service of their brand. And it’s an understandable challenge. Creating your own analytics toolbox, and using it well, isn’t easy. But it is absolutely necessary. 

How Analytics is Transforming the Retail Merchandising Industry

Retail is increasingly moving in a digital direction. Is this the end of in-store shopping? Of course not. But the next wave of retail leans heavily toward a complete integration of the online and in person brand experience for consumers. The retailers who successfully ride this wave are going to rely on the power of analytics and other digital solutions to move fast and change at the pace of popular demand, spotting market or product gaps and marketing opportunities as they emerge. 

You need to be able to gather and interpret your data at speed, mining it for both insights and opportunities. It’s analytics that will help you understand customer behavior, make accurate and timely complementary product recommendations, create an informed and relevant physical retail space and more. Analytics are what you need to learn and grow – not just once, but every day. Fluidity and flexibility are key to not just surviving but thriving as the retail landscape continues to evolve. 

How Can Bluecore Help?

Retail isn’t what it used to be. Technology and customer demand are driving the industry in an increasingly fluid direction, where retailers need to be as fast as they are adaptive. But in an omnichannel world, that kind of fast twitch navigation isn’t easy. Brands are left with a lot of data to sort through and make sense of and not a lot of time to do it in. 

Without the right retail technology, wading through all of that data is an insurmountable task. Retail merchandising analytics are what you need to take your brand from slow and static to fast and fluid. Simply put: You can do more, faster. 

You can do even more with Bluecore. Our core team of experts understand the value of your brand, your time and your data. Let us help you drive success with expert guidance, and bespoke recommendations tailored to your business, your brand and your unique needs. Get your retail merchandising analytics started with Bluecore today.