Retail Analytics Series Part II: Small Business
By Bob Deakin
In Part I, I touched on how retail analytics can benefit the individual entrepreneur. Market research, profitability and security top the list of advantages individual sellers have at their fingertips with little investment. Research will take time that Amazon, eBay and Etsy sellers might not wish to spend. It’s up to them how deep of a rabbit hole they want to jump into.
For the small business (500 employees or fewer with annual receipts under $7.5 million, according to the SBA), it’s on your marketing person or team to monitor the crystal ball into your customer’s world. Big data for small business is like having a website in the 90s.
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Do you have a marketing team? In the real world, many small businesses don’t have a marketing budget, per se. You may be relying on certain individuals to perform marketing duties, or employ a third party like Bixa or Antedote to do it for you.
Clutch offers a list of the Top Market Research Companies for 2024. It’s a good place to start to get an idea of the scale at which you wish to operate. Compounding matters, many small companies defy categorization, even if they work within a specific industry.
Customized or “Off-the-Rack”
The Farnsworth Group simplifies market research into two categories: Primary and Secondary.
Primary (or custom) research is performed specifically for your organization and no one else. Secondary is “off-the-rack” research reports readily available for free or at low cost.
“In general, you should plan to spend about $20,000 to $50,000 for a qualitative or quantitative custom market research project,” Farnsworth’s states. “For market research projects completed by a specialist firm within your industry niche, expect to lean into the higher end of that range.”
Is It In Stock?
Retail software specialist Celerant points to inventory management and supply chain optimization as the two core areas where retail analytics save the day for your small business. The intimate knowledge of your inventory, product performance and level of demand enable your purchasing (and accounting) department to perform at optimum efficiency.
“A finely tuned supply chain that makes sure products are available right when the customers want them, leads to an even happier fan base and more sales,” the Company states in a release last year. “From optimizing workforce management and scheduling to improving store layouts and product placements, retail analytics can open up a whole new world of opportunities for operational efficiency.”
Anyone who has worked for a retail company knows that a customer will drop you in one click if you don’t have the item in stock. The word backorder now applies to new Apple products, Nike shoes and game releases. If your item is not famous, your customer will find an equal version of it somewhere else, especially if it’s for their child.
Big Data for Small Business
Not every company has $50k or any k to drop on retail analytics or market research. For small businesses, though, it may be simply be a matter of prioritization. Australian business tech company Podium names four categories every small business should consider to benefit from retail analytics.
Define Goals and Objectives — These may include improving customer experience, optimizing operations, or increasing revenue. “For example, if one of your objectives is to improve customer retention, you may select churn rate or customer acquisition cost as a customer retention KPI.”
Inventory Your Data Sources — Utilize the many streams you likely have your team working on every day such as a CRM system, chatbots, social media channels, customer review sites, and Google Analytics, among others. “Consider factors like the quality, volume, and diversity of the data.”
Select Appropriate Data Analytics Tools and Technologies — This could be your data analytics platform, database management system and other sources. “When selecting these tools, consider your budget, the availability of resources and skills at your organization, as well as the data sources and formats you’ll be working with.”
Implement Data Collection and Cleaning — All data science sources will stress clean, accurate, and error-free data. It includes removing duplicates, correcting values, and standardizing formats. “When evaluating data analytics tools and technologies, consider whether they automate any of these tasks for you.”
To quote the SBA again, there are 33.3 million small businesses in the United States as of 2023, which is 99.9 percent of all of them. If you want to grow, retail analytics provide a healthy boost.
As Microsoft famously asked in its 1994 ad during the infancy of the internet, “Where do you want to go today?”
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