Retail marketing analytics is a game changer in today’s competitive world. Using data-driven insights, businesses can make more informed decisions about how they approach marketing, improve relationships with customers, and ultimately make a positive financial impact on their company. Retail marketing analytics, however, covers a lot of ground, so what does it mean, and how can it help your business grow?
This guide will help introduce you to the basics of retail marketing analytics, what metrics to keep an eye on, things like tools and technologies you can use to help your efforts, looking at case studies of how some of these tactics are put to use, and a look at the future direction of the industry. If you are a retailer trying to understand more about your customers or if you are a marketer wanting to maximize ROI, this guide is for you.
THE BASICS OF RETAIL MARKETING ANALYTICS
Retail marketing analytics is all about gathering and analyzing data to make better marketing decisions for your retail business. It’s a methodological method for understanding customer behaviors, spotting market trends, and measuring the performance of marketing campaigns.
The value of retail marketing analytics comes from providing businesses the power to answer questions, such as:
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What is the effect of marketing campaigns on sales?
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What is driving customer churn?
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What channels have the greatest ROI?
Leveraged correctly, these findings can produce growth plans that more closely match customer needs while delivering full operational efficiencies.
Looking to understand how marketing analytics powers data-driven decisions? Read our complete guide on marketing analytics.
The Key Metrics That Matter
Getting started with retail marketing analytics. The beginning of a journey in retail marketing analytics begins by choosing the right set of metrics to pay attention to. Here are a handful of the most important that every retailer should track.
Conversion Rate
The conversion rate is defined as the percentage of visitors who perform a desired action, such as making a purchase, signing up for a newsletter, or downloading a coupon. A high conversion rate means that your marketing is relevant to your audience.
Pro Tip: A/B test your marketing messages, landing pages, or product displays to optimize for conversion rates.
Customer Lifetime Value (CLV)
Customer Lifetime Value is the amount of revenue a business can reasonably expect from a typical customer, across the whole of their relationship. It’s the gold standard that enables stores to optimize for long-term profit, rather than for any one transaction.
Short Formula:
CLV = AOV x Purchase Frequency x Customer Lifespan
Use this calculator to calculate the lifetime value of customers and understand how much this can be spent on acquiring new customers (without losing out!)
Average Order Value (AOV)
The AOV is simply the value of the average order; it should not be confused with average sale price or average income per user, which are measured in different ways. Retailers can use AOV to identify areas for promoting upselling or cross-selling techniques.
Ideas to Boost AOV:
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Offer bundles of products at a special price.
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Provide free shipping on orders over a set amount.
Return on Ad Spend (ROAS)
ROAS is a quantification of progress that the consumer’s money makes when invested in advertising. This metric allows retailers to distribute marketing spend more effectively by channel, ensuring every dollar is going toward delivering results.
Top Tools and Technologies in Retail Marketing Analytics
If you want to maximize the benefits of retail marketing analytics, you must have the right tools and platforms. Here are some of the most widely used by retailers today:
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Google Analytics
A longtime favorite, Google Analytics is a great tool for those looking for detailed analysis of their visitors, traffic, and e-commerce. -
Tableau
Tableau is a robust, highly effective business intelligence (BI) platform that gets raw data into readable reports and visualizations, for a significantly more productive, better informed business. -
Shopify Analytics
If you run an online store using Shopify, their built-in reports are packed with data that comes in handy as you can get sales reports, product performance, and customer insights. -
HubSpot
HubSpot Streamline your approach to marketing analytics via tools that can track email campaigns, customer journeys, and social performance. -
AI-Powered Platforms
Other platforms like Grow and Data Robot apply highly sophisticated machine learning to retail analytics, estimating customer behavior and providing actionable insights.
Retail Marketing Analytics News: The Future of Retail Marketing Analytics
Retail Marketing Analytics of the future is full of possibility, driven most of all by tech innovation.
AI and Machine Learning
AI and machine learning technology are being leveraged more and more in retail to analyze massive data sets, provide hyper-personalized recommendations, and automate repetitive tasks, such as inventory forecasting.
Real-Time Analytics
Real-time analytics is in fashion as companies want to react as fast as possible. Think about being able to modify a marketing campaign on the fly with real-time sales information.
Omnichannel Insights
As customers engage on many channels, omnichannel analytics will be vital to offer an integrated, seamless customer experience in-store and online.
Data Privacy and Security
As consumers increasingly worry about their privacy, companies need to adopt clear data practices. Establishing trust will emerge as a critical part of tapping the power of analytics.
Unlock the Value of Retail Marketing Analytics
There is more to retail marketing analytics than mere number-crunching; it’s about leveraging those numbers to bring value to your business and, ultimately, expand customer relationships. From monitoring important metrics like CLV and AOV to experimenting with new, state-of-the-art tools and integrating future trends, the options are endless!
When you add analytics to your marketing mix, you learn where to nudge, dive, or do more of something to act strategically and stand out amongst the competition.
Not sure where to start? Start by assessing your existing metrics and seeing how these correspond with your business needs. From there, dive into tools such as Google Analytics or Tableau to transform raw data into actionable insights.
Get started today to learn from the smartest and build a better business tomorrow.
