With the right systems for collecting and analyzing information about sales and inventory, companies can rapidly adjust their operations to align with changing consumer interests and other market forces, maximizing their opportunity for profit. A recent article published by Forbes examined how Procter & Gamble, which owns many of the country’s most commonly purchased consumer goods brands, is actively searching for ways to put its data to use.
To maximize the flexibility of its supply chain and create more opportunities to adapt to changes in the market, P&G has shortened its planning cycles. This allows the company to introduce new products and adjust its marketing strategies more frequently. Of course, capitalizing on the opportunities this creates requires a sound understanding of consumer purchasing trends.
P&G’s senior vice president of product supply, Julio Nemeth, described the company’s plans in more detail at the recent North American 3PL Summit and Chief Supply Chain Officer Forum in Chicago. According to a Forbes review of Nemeth’s presentation, he said P&G is expecting to see a 2 percent increase in sales and margin improvement of up to 5 percent as a result of making its supply chain more nimble.
Analytics offer a promising outlook not only for brand owners, but also for retailers. If store managers can more effectively identify patterns in consumer behavior, they can do a better job of aligning their inventory with demand, ordering the right products at the right times to increase sales and revenue.
IBM commissioned market intelligence firm IDC to administer a study looking at the typical return on investment from predictive analytics projects. The analyst’s report suggested that ROI averages about 250 percent, but CFO Magazine spoke to several executives who note that companies must take concrete action to realize the value of analytics programs, regardless of how they determine ROI.
“You need to follow through on it and change your marketing campaign, or the way you interact with customers, or stock your inventory, or whatever,” explained Dan Vesset, vice president of business analytics at IDC. “Companies can get too focused on just the data and analytics.”
For retailers, taking effective use of the vast amount of data generated by day-to-day transactions requires a modern point of sale system that is capable of logging changes in inventory and reporting the data in a useful format. John Elder, CEO of analytics firm Elder Research, notes that companies need to be wary of how marketing changes can have unexpected consequences, including the “cannibalization effect.” He notes the example of McDonald’s realizing that heightened sales of fish filets driven by strong promotions typically came at the expense of sales of other menu items, like the Quarter Pounder.
Security is also an increasingly pressing concern for businesses of all kinds, with high-profile stories of data breaches proliferating in the media. Because multiple workers typically use the point of sale system on a daily basis at most retail shops, these companies have a particular need to be able to define each employee’s security rights and monitor activities associated with different users. When owners are looking into different options, they should focus on investing in a comprehensive store management software solution that offers the inventory reporting and security features needed to deliver a strong return. The Visual Retail Plus suite of software is the ideal POS for any business. With VRP managing the little things like inventory, time and attendance, and payroll, you have more time to run your business. Be sure and contact us for more information about our features and to receive a peek at our free demo version of the software.