James Taylor has written an excellent white paper of broad interest to retailers: Building Customer Engagement and Loyalty in Retail. Within the paper Taylor highlights that the challenge for retailers is determining where to focus their predictive analytics and decision management efforts. He addresses it application across three strategic areas – building customer engagement and loyalty, controlling costs and driving a successful strategy for growth.
The first couple of paragraphs excerpted below will give you a flavour for it:
Retailers see tremendous value in business intelligence and analytics. They collect a vast amount of data and see analytics as a way to make sense of it all. As the Big Data wave washes over them, they find themselves acquiring new sources of data, greater volumes of data and more real-time context. This increasingly data rich environment offers tremendous potential for improving business results by making increasingly data driven decisions.
This same growth in data volume, and the growing need to make more decisions more rapidly, is pushing retailers to look at new approaches and technology. Many retailers are adopting predictive analytics to extract more meaning from their data. These mathematical techniques process large amounts of historical data to make predictions about the future. They allow a retailer to peer through the veils of uncertainty by giving them usable probabilities—how likely is this transaction to be fraudulent, how loyal is this customer, what offer will be most effective at increasing basket size for these customers and more. These predictions, these probabilities, can be used to improve decision-making throughout the organization.
The full white paper can be downloaded here: Building Customer Engagement and Loyalty in Retail