Global brick-and-mortar retailers are struggling to compete against their digital rivals. Smaller retailers have been suffering the most, because they can’t compete on the same margins as larger competitors. Some experts have warned that small retailers will eventually be extinct. According to Marc Bain:
“In a recent survey (pdf), 58% of executives at US middle-market retailers predicted that brick-and-mortar-only stores are destined for obsolescence. The survey polled 250 respondents, and was conducted by Harris Poll on behalf of CIT Group, a bank that lends to small and middle-market businesses.”
Despite the challenges, many small retailers have found innovative ways to compete. Savvy retailers are collecting point-of-sale data to optimize their supply chain management strategies, understand consumer buying profiles and forecast future sales.
Toshiba and SAS recently formed a joint-venture to develop a predictive analytics tool for retailers across the globe.
“To be successful today, it’s important that retailers keep in tune with their shopper’s unique preferences and behaviors,” said Fernando Yamada, president of Y. Yamada. “The combination of Toshiba and SAS coming together to bring visualization and predictive analytics to the retail industry is sure to better empower retailers around the world to optimize interactions with their customers across all channels and in a meaningful way.”
However, these tools are often outside the price range of smaller retailers. Fortunately, newer and more affordable options are being released.
Small Retailers Use POS for predictive analytics
POS analytics technology used to be too expensive for SME retailers. However, new POS tracking and predictive analytics tools are much affordable. Sara Angeles, a staff writer for Business News Daily, believes that Vend is the best option for small retailers.
“After much research and analysis of point-of-sale (POS) systems, we recommend Vend as the best all-in-one POS system for small businesses… One thing small businesses love about Vend is its simple, intuitive interface. It doesn’t require much training to understand how the software works, and because Vend is cloud-based, you can easily use it on a Mac, a Windows PC or an iPad. You can also connect Vend with other POS equipment like barcode scanners, printers, cash drawers and credit card readers. As mentioned above, the software is compatible with hardware available in the market, so you don’t need any technical skills to make sure everything plays nicely together.”
Data mining point-of-sale data allows them to:
- Predict future sales
- Identify demand for specific products
- Improve inventory management systems
- Create demographic profiles of their customers
- Reduce case sorting and segregation by calculating optimal order quantities
Analytics experts claim that predictive analytics will play an increasingly important role in retail management in the near future. POS data will play an important variable in their predictive analytics algorithms.
POS Data Will Be a Game Changer for the Retail Industry
Large retailers are always using new technology, such as Microsoft AX to streamline their businesses. They have been collecting POS data for years, but have had difficulty using it effectively.
In 2011, Scott Koegler, publisher of supply chain management newsletter EC-BP.org, discussed the importance of storing POS data. However, sales data has traditionally been segregated by supplier. Their data was almost useless, because it was so fragmented. They also had difficulty accessing it, since didn’t have access to effective data mining tools.
Fortunately, new tools are available to help retailers track POS purchases. QR codes have made tracking consumer purchases easier than ever. Cloud computing also enables retailers to store hundreds of terabytes of data, which can be mined in a matter of seconds.