How Major Retailers Use Retail Data Analytics to Target Shoppers

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Three young shoppers, walking past shop windows and pointing.Today more than ever, businesses around the globe are using data analytics to drive profitability and improve customers’ shopping experience. For example, online retailers such as use data analytics to suggest products based on shoppers’ purchase history. Brick-and-mortar retailers use analytics to help determine store layout and space allocation and optimize the number of products they offer in various categories.

The use of retail data analytics is booming. A recent survey of 350 brand manufactures and retailers from the data science firm Alteryx and the retail knowledge forum RetailWire revealed some interesting findings. Eighty-one percent of respondents said they use data analytics to gather shopper insights. Seventy-three percent said data insights are fully essential to their department’s performance, and 76% said data insights are critical to the performance of their organization.

However, the survey also found that while the majority of companies understand the value of data analytics, most do not know how to sort and harness the data they collect. Twenty-four percent of respondents described themselves as data analytics “newbies,” and only 16% of those polled said they considered themselves to be experts. As such, the need for professionals who understand how to sort and use data to gain insights and drive business decisions is as robust as ever.

Professionals who are interested in helping companies leverage data to develop optimal sales and marketing strategies must start by building certain skills. Completing an advanced education, such as an Online Master of Business Analytics, can provide students with the tools and knowledge to pursue careers in the field.

An Overview of Retail Data Analytics

Retail data analytics is the process of collecting and analyzing data, such as customers’ shopping patterns and purchase frequency, to improve operations and increase sales. Grocery store reward programs are an excellent example of how this works.

When shoppers sign up for this type of program, they fill out a form that includes their age, address, and household income. Each participant is then assigned a rewards number, which they must enter at the checkout terminal to receive promotional discounts.

Rewards programs enable stores to track the buying patterns of shoppers in various demographic groups, which in turn helps them optimize supply chain management and set pricing. This also explains why the same market chain offers different products and price points at stores based on their location and customer base.

Retail data analytics can also help companies understand when (during which months) customers are most likely to buy various products. This enables organizations to fine-tune their marketing strategies to maximize the return on their advertising spending.

Examples of Retail Data Analytics in Action

Other retailers, such as Rite Aid and Nordstrom, also use data analytics to create deeper relationships with their customers. For example, in July 2019, Rite Aid announced a partnership with a large analytics software provider as a means of offering “more consistent, compelling, and continuous customer experiences.”

According to a company press release, Justin Mennen, Rite Aid’s senior vice president and chief information officer, said the partnership would provide Rite Aid with data-driven insights that would enable it to “provide customers with everything from medication reminders to customized promotional offers.”

Nordstrom’s approach is similar. It involves leveraging its rewards program data to determine which products to recommend to various customers. For example, each online customer has a profile that contains data on their style preferences and purchase history. This not only enables Nordstrom to alert customers when their favorite products and brands are available, it helps the company suggest new items based on products customers have bought in the past.

Another strategy used by Nordstrom involves geofencing. In this instance, each store is informed when a customer downloads the Nordstrom app inside its brick-and-mortar location. This allows the company to provide shoppers with hyper-personalized and hyper-localized service.

The Benefits of Earning a Business Analytics Degree

Professionals who are interested in pursuing a retail analytics career path will find that an advanced degree in business analytics can help them succeed. In addition to helping refine the competencies to build effective marketing strategies — such as strong analytical, technical, and critical thinking skills — business analytics programs can prepare individuals to master the latest data mining methods.

The U.S. Bureau of Labor Statistics (BLS) reports that employment of operations research analysts, the category under which retail data analytics is grouped, is projected to grow by 26% between 2018 and 2028. This is much faster than the projected growth for all occupations.

This career path can also be lucrative. April 2020 data from the compensation website PayScale suggests that the median annual salary for big data analytics professionals is approximately $109,000. Professionals in advanced roles, such as director of analytics, can earn an average of around $138,000 per year.

Learn More

Data and technology will continue to impact the retail sector for years to come — and demand for qualified analytics professionals already exceeds the supply. There has never been a better time to develop the skills and knowledge to pursue jobs in this career path.

The Online Master of Business Analytics program at Ohio University is designed to provide students with advanced expertise to stand out in the field of retail data analysis. The targeted curriculum includes courses such as business intelligence, prescriptive analytics, and strategic use of analytics.

Discover how an Online Master of Business Analytics from Ohio University can help you achieve your dream career.

Recommended Readings

How Organizations Are Staying Competitive with Business Intelligence Tools
A Career in High Demand: Business Analytics Salary and Other Benefits
Making Use of Data: What Is Big Data Analytics?


Alteryx and RetailWire, “Shopper Insights: Insider Perspectives”
Forbes, It’s Time to Get Personal with Your Customer
Forbes, Top 7 Skills You Need to Have as a Data Analyst
Forbes, The 10 Keys to Nordstrom’s Digital Transformation
HCL Technologies, Retail Analytics
Investopedia, “Data Analytics”
MarketWatch, Supply Chain Big Data Analytics Market 2019 Global Industry Analysis, Development, Revenue, Future Growth, Business Prospects and Forecast to 2024: Market Reports World
Ohio University, Benefits of a Business Analytics Course and Degree
PayScale, Salary for Skill: Big Data Analytics
RiteAid, Rite Aid Partners with Adobe to Drive Digital Transformation
Stitch, Unlocking Big Data with Retail Data Analytics
U.S Bureau of Labor Statistics, “Big Data Adds Up to Opportunities in Math Careers”
U.S. Bureau of Labor Statistics, Operations Research Analysts