The retail industry generates a massive amount of data today including warehouse and inventory details, customer information, and transactional data. The retail sector has been using data analytics on a relatively small scale. Although the traditional analytics provided retailers with limited insights, the new technologies combine business intelligence and customer intelligence with raw transactional and behavioral data to generate derived measures. Today, the most advanced retail analytics software can assist with inventory planning, streamlining retail POS, shelf management, generating customer insight, customizing promotions, demand planning, and sourcing. The recent procurement market intelligence report from SpendEdge forecasts the market to grow at an impressive CAGR of 21%. However, leading retailers are facing major procurement challenges in integrating big data analytics for generating insights.
Procurement Challenges in Retail Analytics Software Market
Lack of Expertise to Manage the Software
Retail analytics software’s such as NetSuite (Oracle), Tableau, RetailSTAR (CAM Commerce Solutions), SISENSE, and SAS Retail Analytics have interface and dashboards that requires expertise to operate. Most retailers do not possess such competencies or skills and would need an IT professional to manage the retail analytics solutions, thereby increasing the cost. To tackle such issues, major retailers are partnering with managed service providers to assist them with the implementation and functioning of the software.
Data Integration Challenges
A single retail store generates data across multiple channels such as warehouse, inventory, POS, and store management. Combine this with numerous retail outlets spread across vast geographies; retailers are faced with problems to integrate all different kind of data to derive meaningful insights. Also, most of the retail analytics software specialize in a specific area, which makes it even more difficult to integrate data from different sources across the retail supply chain. Majority of the retail analytics companies provide customers with a free trial before they move on to full version. Retailers can test the software out for compatibility with multiple data points before full-fledged implementation.
Data Identification and Utilization Challenges
Although retail analytics is capable of doing advanced nature of tasks, the final insights derived will highly depend on the nature of data provided as inputs. The data captured by retailers may vary, which makes it essential for retail analytics software to identify data points accurately. Although most retail analytics software providers assist buyers in filtering and utilizing data for insights, they might later find it difficult to judge the data insights provided by the solutions. It is a good practice to insert clauses in the contract requiring suppliers to train their employees.
Challenges in Alignment of Business Functions and Processes
With such high levels of volume, variety, and velocity of data being produced, buyers must automate business processes to ensure such data is available for effective analysis. However, due to the prevalence of legacy systems, buyers may face difficulty in automating different business processes. To tackle such issues, retailers invest in facilities and systems that can provide real-time data recording capabilities to implement analytical solutions.
Read more about the top procurement challenges in the retail analytics software market along with predictive analytics in retail, big data analytics, pricing insights, cost-savings opportunities, and supplier selection criteria in SpendEdge’s upcoming report on the global retail analytics software market.