Barriers To BI In Retail
Today, most retail stores operate on razor thin margins. The cost
of a wrong decision about trends and customer needs can not only
significant impact profits but may tip a business over the point
of viability. For this reason, retail probably more than any other
industry sector needs to ensure that decisions are logic based,
rather than emotion based.
Stripping emotions out of consumer selling may seem wrong on many
levels, considering that buying decisions are emotive based [a billion
dollar advertising industry relies on this fact]. However, how decisions
are made on the buying side, do not always equate to the selling
side of the equation.
The need for retail intelligence is not new to retailers -it has
been many years since point-of-sale [POS] technology evolved from
managing transactions alone, to one that also includes stock management,
promotion management and merchandising.
The collection of data for these functions has been a critical
step in the path towards integrating BI into retail management systems.
This collection and use of information is already used to increase
sales and promote efficiencies. However, whilst the collection of
vast amounts of data has been mastered, the fundamental need to
use that data as a basis of logical decision making has not quite
Many retail organizations have invested significant capital to
implement unified, enterprise-wide platforms for their operational
systems - they have often neglected to provide an equivalent unified
platform for their business intelligence [BI] solutions.
The main barriers include:
- Access to information for strategic planning and deployment
of resources beyond the current quarter
- Lack an integrated BI approach enabling data to be extracted
from disparate information systems, and combine it in a centralized,
- Lack of business rules supporting reporting, analysis and collaboration
Whilst most retail management systems adequately provide for historical
reporting, few support future insights, leaving retailers to rely
on basic extrapolation of past performance and guesswork.
Next: Retail IT Systems
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More Detail on Retail BI Strategy, Program & Technology
Index | BI Strategy | Complexities
| Barriers | Retail
IT Systems | BI IT Optimisation
| BI Evolution | Integrated
Retail BI | Implementation
| Business Benefits | RMS