POS SKU Analysis Provides Key Insights Into Buyer Behavior

By  Rob Humphrey, National Account Manager, nuBridges and Jeff Burdick, Chief Operating Officer, eSENSE Retail Corporation
Retailers have had a tough couple of years, as have their suppliers, the packaged goods manufacturers. Identifying buyer behavior patterns and underperforming products quickly is a surefire way to capitalize on opportunities and turn store performance around. Being able to slice and dice POS data to measure and track customer buying behavior and sales trends on demand is vital to achieving a leading edge. Simply put, it enables stakeholders' merchandising, merchandising execution and operations' to make sense of the volumes of retail sales data collected daily.

While POS analytics capabilities can be developed using business intelligence packages, a new breed of web-based solutions is emerging. The most advanced of these analytic solutions integrate retail data points into customized online dashboards that give users' based on their role in the company "visibility to on-demand analytics" those key performance indicators (KPIs) that lead to fact-based decision making. This actionable information helps to increase ROI and drive down the cost of doing business within each stakeholder's respective business model. What's more, information can be analyzed and viewed as it is received; cutting days off the time it takes to recognize problems using conventional methods based on sifting through reams of spreadsheets.

Another important component of the newest POS analytics programs is the ability to transmit confidential product SKU information securely using Electronic Data Interchange (EDI) to an online web portal that provides a customized dashboard to analyze retail customer buying behavior and sales trends. The threat of theft by cybercriminals is too great to send any sensitive company data or document over an unsecured pipe, yet many retailers still connect with their manufacturing trading partners every day over insecure value added networks (VANs).

Putting SKU Data to Work
Analyzing customer buying behavior and sales trends using an integrated systematic approach can level the playing field for smaller retailers competing against larger retailers, and reduce costs for all retailers. Having visibility into KPIs by geography, product category or SKU - either in a 3D geographical view with charts or grid views based on roles via a customized dashboard - and being able to run a variety of sales and inventory reports by market segment on demand provides actionable intelligence that translates directly to competitive advantage and operational efficiencies of scale.

With a dynamic web-based POS analytics solution, retailers can provide value to manufacturers with timely insights into product performance by store or region. Being able to manage, monitor and report on product SKUs at any level of detail by role is a powerful tool for timely analysis and drives fact-based action. Retailers can zero in and turn their attention to those stores and merchandise that need it most. What's more, being able to run product category or individual product performance reports at the store, regional or national level for any time span provides a history that can be used to anticipate product demand using a variety of parameters that ensure the appropriate mix of products are stocked at the right time.

Security Matters
Transmitting POS information from stores to headquarters through secure EDI data transfer will keep confidential information out of the wrong hands, and keep track of when information is sent and received.

"Pay-As-You-Go" Just Makes Sense on So Many Levels
Using a web-based POS analytics solution on a monthly subscription basis derived on the amount of data transported ("data load") eliminates upfront software/hardware investment and deployment costs, and scales without a cost increase to provide unlimited access to any number of users. Software as a Service (SaaS) solutions are managed by the vendor and produce a quick return on investment over traditional software solutions that must be installed in a data center. This monthly "pay-as-you-go" service allows for quick implementation of analytics programs and the avoidance of capital expenses. Some solutions can also push alerts based on a variety of KPIs to a variety of desktop and mobile devices. This provides employees and manufacturers with timely information about product performance and inventory levels in their offices, in a store aisle or anywhere in between.

Laser-Focused Approach Abolishes Guessing Games
Working together, retailers and manufacturers can be more successful. Many retailers already collect POS data from their stores -- an important first step. Being able to distill that information down to actionable information based on current and historical patterns provides immediate value to retailers working with multiple manufacturers. It provides the facts retailers need to improve underperforming stores, select the most popular products, and make decisions on any retail key performance indicators. The objective, fact-based category management derived from easy-to-interpret POS analytics, gives retailers a laser-focused view of each product's performance in every store, removing the subjectivity from the everyday important decisions that drive a company's growth and profitability.

Rob Humphrey is the national account manager for data protection software vendor nuBridges, Inc. Rob can be reached at rhumphrey@nubridges.com. To learn more about nuBridges, please visit www.nubridges.com.

Jeff Burdick is Chief Operating Officer for eSENSE Retail Corporation, a point-of-sale analytics company for the retail and manufacturing packaged goods industries. Jeff can be reached at jeff.burdick@esenseretail.com. To learn more about eSENSE Retail, please visit www.esenseretail.com.