Initiating the LPG (Liberalization, Privatization, and Globalization) policies, the consumer behaviour is also changed drastically with their preferences and choices of the products available in the market. Consumers are demanding Global Products at Local Markets. Consumer Point of View (40-60% of the total consumer’s of the economy or total population), with available time if he found more products available (all different products at one place), he will ready to pay higher prices. Retail industry usually follows marketing strategies to attract customers/consumers. As it is evident, 80% of consumer’s will visit the same stores with increase their level of satisfaction (psychology of customers).
Real analytics for retail should be effective, robust and scalable applications for the effective decisions. Analytics should able to understand the rapid changes and needs of the modern retailer. Analytics should always should able to capture the above information to provide a better solution to the retailers. Analytics in retail domain needs a complete solution which could be dynamic and flexible for its applications and widely useful in order to take decisions more efficient and innovate. Retail analytics components are including a) consumers (demand and decision makers), b) retailers (market providers) and c) vendors (suppliers of the produced goods).
A microeconomics principle suggests how the markets functions and its consumer preferences. Major important factors that analysts keep in their consumer analysis including a) Consumer Theory/ Behaviour, b) Consumer preferences, c) Nature and differentiation of the products, d) Demand and Supply differentiate with Price of the products with respect to the market price, e) Budget Constraints of the market participants, f) Revealed Preferences, g) Utility maximization of the products with respect to the various similar products, h) Markets and their competitors’, i) Asymmetric of Information, which consumers doesn’t have but produces have and finally uncertainty.
Retail analytics should deliver scalable, flexible, advanced and cost effect analytics solutions for optimizing merchandizing and marketing decisions. In point of retailers, the following points should keep in mind, which includes, a) Basic objectives is minimize the cost of production (fixed cost, variable cost) with optimizing profit; b) Profits including economic profit or normal profit; c) asymmetric information of future producing units, product initiatives etc., d) knowing their stakeholders and competitors, e) uncertainty, f) utilizing of the opportunity cost, for the betterment of the industry, g) factors including price – demand –supply – equilibrium – profit, g) Managerial Cost (fixed, variable cost) includes salaries, rent etc., i) resources, technology, information, j) Threatens and k) Damaged, Loss in management and marketing.
Vendors are the major source for the retailers for the smoothing their business. In view of the vendors the following points should consider by the analysts including, a) supply chain, b) demand forecast, c) timely supply, d) price and profit, e) costs (fixed, variable cost, transportation cost), f) contracts and contact within the industry.
These components can be deployed on various computer platforms and easily enhance the functionality of a retailer’s different information systems such as for example: Data warehouse applications, OLAP data mining tools, Information management systems or information portals, Decision support systems Retail Analytics has built a comprehensive series of sophisticated modelling and optimization tools to provide analytical support to essential business functions. Retail Analytics components can be deployed either as “standard”, or as building blocks of a more customized implementation project, when unique requirements derived from specific business processes, rules or information sources need to be met.