Retail Challenge: How Supermarkets and Other Commercial Enterprises Benefit from Business Intelligence

BI expert arcplan recommends using business intelligence (BI) solutions to meet industry-specific requirements

Wayne, PA, USA / Langenfeld, Germany – March 20, 2014 – The challenges facing retail companies today are growing rapidly, some of which include increasing competition, rising customer demands, saturated markets and a growing volume of data. Numerous internal and external parameters influence business processes, making it more and more difficult for decision-makers to adjust the right levers at the right time. Against this backdrop, international BI expert arcplan advises retailers to meet the dynamic market requirements encountered in an era of big data and internationalization using innovative business intelligence (BI) solutions.

The retail industry in particular is reliant on the anticipation of market changes to an ever-greater degree. Despite increasing retail prices, supermarkets and discount stores are fighting sinking margins, as shown, for example, by the Consumer Index Total Grocery published by the German market research institute GfK. In addition, the popularity of individual products in the range among different consumer groups is subject to strong fluctuations, making range calculations difficult, particularly for perishable goods. During peak hours, additional staff members need to be available to deal with an increased workload. As the GfK analysis reveals, these parameters are not a matter of chance but are subject to certain laws. In a complex system made up of so many dependent relationships, comprehensive and absolutely precise planning is the prerequisite for successful business. Analyses related to procurement, processes and sales provide the trader and suppliers with price information and quantity details, support corporate logistics and optimally depict internal business processes and staff management. This gives retail companies a quicker time to market and enables them to react to changes in the shortest time.

Time is money

Accurate time management also plays an important role at supermarkets and discount stores, as their shelves often feature highly perishable goods that usually cannot be stored for very long. Products expire on a daily basis, which is why anything that is not sold in a timely manner represents an economic loss. On the other hand, there are also deliveries that take place just once a week. This means that if product supplies are lower than the demand, lack of products results in lost sales opportunities. Retail companies also struggle with tight margins. Individual goods also have to be turned over in large quantities in order to yield a profit, and price increases are feasible only to a limited extent. The use of BI solutions makes it possible for traders to produce deviation analyses. For instance, an out-of-stock analysis provides information on the most popular items in the core range, zero sales and promotional goods, revealing where product supplies fall short. Companies that realize such evaluations on a daily basis react more quickly and are more efficient than their peers.

Benefiting from big data

Small errors in decision-making and slightly erroneous planning have huge ripple effects. For this reason, business intelligence software used in the retail industry must do far more than just prepare data for a report using different sources; it must rapidly gather all relevant parameters for making quick decisions and provide a comprehensive picture of the current sales situation based on the data available, while also showing the overall context. Big data also plays a key role here, as master data management is increasingly connected with various work processes. As a result of these new data connections, new customers are created, information from social networks is organized, suppliers are listed and catalogues are created. Such information is also becoming more and more important for reporting and other specialized departments such as marketing.

“In the dynamic trading sector, BI solutions provide huge added value. Now more than ever, trading companies are able to optimally keep an eye on all business-relevant data. This enables many of the developments arising in this area to be identified in advance. The result is a faster and more customized reaction to business problems,” explains Achim Röhe, VP Professional Services EMEA at arcplan.

About arcplan
arcplan is a leader in innovative Business Intelligence, Dashboard, Corporate Performance and Planning software solutions for desktop and mobile use. Since 1993, arcplan has enabled more than 3,200 customers worldwide to leverage their existing infrastructure for better decision making. Empowering all users to connect and collaborate with relevant information is crucial for improving business performance. With arcplan – it simply works.

arcplan's flagship product arcplan Enterprise was rated the #1 third party tool for the SAP NetWeaver® Business Warehouse application, Oracle Essbase, and IBM Cognos TM1 in The BI Survey 13 (2013)

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