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By: Russ Hill, Senior Director Retail, Wholesale Dist  Industry Marketing at SAP BusinessObjects Division

Back in the olden days, retailers had it easy. Deciding what to sell and which promotions to run were no brainers or “intuitive override”.  Retailers simply filled their shelves with merchandise, printed weekly circulars with random promotions and waited for the customers to come.


How times have changed! Consumers today are savvier (regularly performing in-store price comparisons on their mobile devices) and more demanding (expecting high levels of customer service and free and fast shipping for online orders).  As a result, deciding what to sell and which promotions to run have become exceedingly complex.  Now, it’s either serve the customer, or watch them go down the street (or online) to your more… understanding competitor.

Therefore, how do you get to know your customers on a granular level, to predict their wants, needs and the promotions that will trigger them to buy? The answer …analytics!


Retailers collect consumer data through requesting customers to  complete  personal info for loyalty memberships and information on purchasing behavior. The world of promotional effectiveness is changing daily to get in touch with their customers in more ways than ever before:

  • Gamification- Offer coupons and other sales promotions across multiple platforms – including old school paper coupons.
  • Extranets- Managing the supply of goods on promotion. Ensure that when retailers do stack ’em high and sell ’em cheap, they don’t end up with prematurely empty shelves or a ton of stock for marking down or which has passed its sell-by date
  • Cyberspace-Integrate online transactional data with customers’ click-through trends, in a bid to react faster to sales trends and improve online promotions.

Analytics can then slice and dice this mountain of data into valuable, digestible information such as which popular products to stock and which segment of customers are the biggest spenders.  This info fuels important decisions and can help you determine which products to stock and what type of promotions to run in order to keep your best, most profitable customers coming back to buy more.


Now here is a real world example of analytics at play.  A large, multi-channel retailer wanted to seriously get to know its customers.  In order to collect consumer data, the company designed a mobile application that received over 6 million downloads.  Using analytics, it segmented customers by how much they were spending and through which channel, either online or in-store, were customers purchasing through the most.  The retailer found that customers who were shopping both online and in the brick-and-mortar stores, were the biggest spenders.  As a result, the retailer designed promotions specifically to target this type of shopper.  These carefully crafted promotions ranged from the ability to buy online and pickup in-store for free to coupons earned after making an online purchase that could be used for in-store purchases.  The customers responded positively to these super targeted promotions.

Times are changing, fast, but retaining your customers doesn’t have to be a mystery. Understanding your customer by using analytics to find out what they really want—that’s what defines a forward thinking retailer.


How are you differentiating yourself from the competition? It takes analytics!

To learn more, check out:

SAP Solutions for Retail

SAP In-Memory Computing

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1 Comment

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  1. Sumukhi Pyla

    Reducing Churn and retaining customer is the #1 focus for every Retailer today! It is very interesting to know how Analytics can enable the retailer to figure out what works. This is  very insightful.

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