Progressive Grocer

APR 2016

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Technology Predictive Analytics P redictive analytics — that is, mining data for information to predict trends and behavior pat- terns — can be used by grocers in several areas: category manage- ment, pricing, inventory planning, e-commerce and mobile marketing, among others. While some major chains deploy this analytical tool throughout their companies, widespread use by grocery retailers remains modest to moderate at best. "Most grocery retailers do not yet have the capa- bilities in-house to fully leverage predictive analyt- ics within their organizations," says Tony Kleiner, senior business consultant at Dayton, Ohio-based Teradata, a provider of Big Data analytics. "Some are in the process of trying to develop these capa- bilities, while many others are still waiting to deter- mine whether they want to make the commitments necessary to become data-driven organizations . " Reena Kapoor, of You Technology, admits that grocers' overall use of predictive analytics is "mod- est," but recommends it as an essential strategy in any chain's business and growth planning. "Tey need strategies to improve their top-line growth and margins," says the VP of product for the Brisbane, Calif.-based provider of digital-of- fer networks. "Predictive analytics can help with this. Moreover, they operate in close competi- tion, and their competitive space is only get- ting more diverse with the advent of Amazon, Google and other online players who have a lot more cash to throw at their business. "Analytic behavioral and value segmentation can — and should — be built to not only help grocers understand their customers' shopping/ spending habits, but personalize the customer experience as well," she goes on to say. "Predic- tive modeling is a must when addressing cus- tomer retention and promotional strategies. Grocery chains sim- ply cannot aford to lose money. Having the means to predict shopper behavior, targeted market- ing, trends for category management Not Ready for Prime Time Widespread use of data mining remains modest among grocers. By John Karolefski and/or pricing could be the golden goose for their long-term health, and even survival . " Other technology executives say that most gro- cers are far from operating that way. For example, Ziad Nejmeldeen, of Infor, fnds that too many decisions are still handled through a mixture of "signifcant human efort" and Excel, when the data and technology have long existed to make those decisions more intelligently. "How many grocers use store-based sales data to make localized assortment decisions for that store?" asks the chief scientist for the New York- based provider of business applications. "And then there is the data that is newly available — such as 134 | Progressive Grocer | April 2016

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