Retail Analytics: Business Creation Plan and Market Analysis

This report outlines a business plan for a retail analytics solution designed to help small and medium-sized retailers leverage data for better decision-making. It begins with an overview of the proposed business, highlighting the rationale behind offering data analytics software to address the ch...Read More

Business Creation

TABLE OF CONTENTS
Overview of proposed business plan...........................................................................................1
Rationale of the proposed business..............................................................................................2
Business value preposition...........................................................................................................2
Methodology to assess market opportunities: market size and profitability................................3
Main industry vulnerabilities and market dependencies..............................................................5
Research design to understand consumer need............................................................................5
Research results............................................................................................................................6
Main marketing aspects & innovativeness of the idea.................................................................8
Financing business & its revenue model....................................................................................10
Globalization..............................................................................................................................10
Organizing team to execute their idea........................................................................................10
REFERENCES..............................................................................................................................12
APPENDIX....................................................................................................................................13

Overview of proposed business plan
In an ultracompetitive and turbulent retail sector, it becomes quite complicated for the
retail organizations to understand their customer desires. Lack of data here isn’t a problem
whereas information which is obtained from multiple system, region and channels is difficult to
use for meaningful results or making informed decisions. Thus, by having data analytics
software, retailers will be able to keep their large data on a computerized platform and connect
all of their operations and gain successful sales. It will also help them to keep control and
monitoring over their business activities with making informed decisions to maximize revenue
and profit during critical time. The idea of designed business plan is about using extensive data
set and performing various analytics techniques i.e. statistical, quantitative and predictive model
in order to make rationalized plans and actions.
The business will provide retail analytics tools for examining their inventory level, sales,
supply chain movement, market demand and other critical data set so as to make sound
procurement and marketing decision. Under this, data will be gathered from target customer
(small and medium sized retailers) and same will be analysed in a proper manner by using
analytical methods like cluster analysis, decision tree, descriptive statistics and predictive
modelling. On the basis of output generated, products that are needed to be kept in shelf in large
or small quantity will be determined and by doing so, sales opportunity will be increased for the
business firm. Apart from this, factors on which firm needs to focus more, will be identified by
using predicative analytics.. All these things will help retail firms in identifying right direction in
which they need to work for earning good amount of profit in business.
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Rationale of the proposed business
Figure 1 Analytical solution working in retail sector
(Source: Data analytics in the UK, 2017)
In today’s era, retailers are moving at international level to establish their presence
worldwide. They are overdriving multi-channel shopper experience in order to generate larger
revenue, gain consumer loyalty and improve their performance by generating superior insight via
advanced analytics. Over the past few decades, digitalization forced retail organization to rethink
their business strategies. Consumer preferences and behavior havebeen changed drastically with
the rising trend of e-commerce. It is therefore, now retail analytics scope has been totally shifted
from POS (point of sale) data to the analysis of large amount of informationso as to have clear
understanding of customer needs and wants. In order to stay competitive and gain success in the
competitive market, it has becomereally important for the existing retailers to use different
analytics solution to identify better product margin, personalized outreach, design a superior
product mix targeting their key customers and makingdata driven business decisions which
ensures a better return on investment. The data analytics solution provide firm really a great help
to have a clear insight towards user behavior, with which they can adopt personalized consumer-
centric strategy in all the areas of operations like marketing, pricing and others.
Business value preposition
 Maximizing efficiency
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 Well-informed and rationalized business decisions
 Analytical solutions
 Proper database integration and its successful management
 Better access to the business information
Methodology to assess market opportunities: market size and profitability
Explosion of large amount of data is a revolutionized business. In today’s competitive
world, every establishment is expecting making their business decisions based on robust data
analysis. Thus, analytical solutions will add value to every area of value chain and organizational
decisions. Solid infrastructure, extremely talented workforce and technological investment
helped UK to thrive in data revolution an analytics sector (Zott and Amit, 2013). As a result, the
data analytics sector is considered vital for the economy as it is one of the developed and
strongest places. Over the upcoming 5 year, industry is expected to grow @177% with the
expected increase in big data users to 644,000.From 2010 to 2015, use of cloud technologies by
the UK business has been doubled from 48% to 84% (Data analytics in the UK, 2017).By 2017,
industry is supposed to create 58,000 jobs and IoT and Big data is forecasted with total revenue
of 322bn GBP by the end of 2020 contribute 2.7% to the GDP. All the factors clearly indicate
that the sector shown good progress and possibly, expected to grow in near future.
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Figure 2 Retail analytics
(Source: The Future of Retail Analytics, 2013)
Although currently, big data providers are serving large retail firms currently with
advanced analytical tools, however, small and medium sized retailers remain overwhelmed due
to scarce understanding of the business data and unavailability of extensive knowledge and
skilled champion and analyst. The main reason why they are not taking full benefit of such
capabilities is that mainly, all the analytics are allocated to their IT department for the data
warehousing & management. However, companies did not use the same as a strategic weapon.
However, current evolving and ever-expanding retail market bringing both the challenges as well
as opportunities for the retailer to diligently examine their large volume and variety of data for
the competitive success. Although several retailers are using data analytics, however, changing
era makes it necessary for the business to replace existing tools and approaches with the latest
one, so that, they can access more information and create amazing shopping experience.
In retail sector, data follows through product manufacturing, shipping, stocking,
advertising, purchasing, consumption and lastly, knowing final user’s satisfaction level which
forward retailers in maximizing their sales and operational performance (Albrecht and
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et.al.,2016). Thus, by providing end-to-end analytics solution to the small & medium sized
retailers, the planned venture will be able to grab the existing opportunity very well. With this,
retailers will be capable of examining huge dataset generated by ERP, inventory control, retail
sensors, social media and others. Business intelligence tools and analytical solutions will render
below mentioned tangible benefits to the retailers, presented hereunder:
 Maximizing sales on each customer visit by having deep understanding of their buying
preferences and pattern
 Finding out new sales opportunity by determining unexpected trends
 Enhance stock management with having greater visibility to product pipeline
Main industry vulnerabilities and market dependencies
The main challenges for the business that the proposed business needsretailer’s critical
data that contains highly confidential data set about their sales, marketing and other activities.
Thus, building trust & integrity among them is the main challenge. Besides this, it is the main
requirement to keep data safe & confidential. With the increased use of cloud based application,
now-a-days, sensitive data is easily accessible from various platform which are vulnerable to
hacking. Thus, security concerns are the main challenge and lack of it might resultant heavy loss
as well as reputational damage (Seifu and et.al.,2016). With reference to huge dataset, its loss
can result in unmet user expectations. Thus, application & server security need to be properly
managed to combat such issues upon which business success is heavily dependent. In addition to
this, licensing can result legacy difficulties which need full-legal compliance.
Research design to understand consumer need
In order to find out current retail analytics need of the existing businesses, data either can
be collected through primary and secondary survey. Here, it is decided to use a mix strategy
wherein an original survey of 20 existing small & medium sized retailers will be conducted
through distributing questionnaire whereas the primary research findings will be evidenced with
the available secondary data (Grant, 2016).Questionnaire contains required set of questions that
will help to generate valid information to assess their current data analytics need. In this, top
managers like executives, managers and directions of the chosen businesses will be surveyed
online. All the 20 units will be selected randomly with equally defined probabilities.
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Research results
After surveying retail executives, it is found that all the small & medium sized retailers
are aware of the analytical solutions and know the benefit of the same. Majority of them did not
currently use any analytics, still, with the changing market, they are considering the need to
implement data analytics for the unique solution and help them in decision-making.
(Source: PWC Global Data and Analytics Survey, 2016)
Evidencing the result, from the secondary dataset, currently, business executives need to
make their decision making capability more speedy and sophisticated as well, so that, they can
achieve a strong position in the market.
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(So
urce: The Future of Retail Analytics, 2013)
Above diagram illustrates that retail after apparel sector, retail comes at second position
that need analytical solution for their dataset.
(Source: PWC Global Data and Analytics Survey, 2016)
From the above diagram, it can be seen that highly data driven business are more
interested in applying predictive models whereas some-what data driven businesses prefers
diagnostic and prescriptive models. Considering retail sector which is largely data driven
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industry and also ever-changing, therefore, majority of the surveyed people stated that they need
predictive analytics for the business unit.
(Source: The Future of Retail Analytics, 2013)
Survey participants also agreed that retail analytical solution will enable them to keep
regular track or monitoring over their business information like inventory, purchase, frequency
of customer visit, sales each visit, marketing and others. Looking to the above results, it
showcase that retailers gave high preference to the better consumer insight and operational
efficiency by robust data analytical framework which will be extremely useful for them in sound
and well informed planning & decision-making. Thus, by using analytical software’s and
business intelligence systems, they will be able to ensure better consumer engagement and gain
success to win a competitive battlefield.
Main marketing aspects & innovativeness of the idea
Marketing is of great significance which aims at attracting more and more users from all
around the world so that they can serve grab large market share (Armstrong and Kotler, 2005).
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The proposed plan will be a B2B business because it will target medium and small sized retailers
existing in the UK. Its marketing strategy will be as follows:
Product: It consists of goods and services that will be offered to the target group. For the
designed business plan, analytical software and tools for performing various analysis like
decision tree, cluster analysis and predictive analysis will be the main product. Services include
consultation, storage of large volume of data, management and its analysis a well.
Price: Charges which will be received in return for the analytical solution rendered to the
retailers is called price. As the venture will target small & medium sized entrepreneurs,
therefore, maintaining an affordable price seems necessary (Yaghubian, Mahmoudi and Tiji,
2016). Availability of innovative analytical software and business intelligence will help business
to establish a good position in the market. Moreover, personalized software will benefit the
business to compete successfully with the top-analaytics businesses.
Place: Business will serve their target users by making personalized contact and
delivering online analytical solution. Besides this, authorized distributors and local offices will
render the needed analytical software to the retailers.
Promotion:Personal contact with the retailers to understand their business need and
providing software solution for analysis their critical business data accordingly assist the entity
to meet user expectations (Luo, Roach and Jiratchot, 2016).Under the integrated promotional
plan, website, social networking channel and newspaper ads will be used for the market
awareness. In addition to this, our analyst personalized attention will encourage word of mouth
publicity.
People: Efficient and talented analysts who are experienced in the analytics sector will be
hiring. Moreover, managerial personnel and software and hardware engineers who graduated
from the well-known universities will be hired, so that, excellent analytical solutions along with
smart consultation services can be rendered to the use.
Process: Understanding business operational scale, identifying their requirement and
delivering the best analytical solution where they can integrate their all the business dataset and
analyze it through various models for the sound decision-making will be the core
focus(Khodaparast and et.al., 2016). In addition, special attention will be made for securing
businesses confidential dataset.
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Physical evidences: Collaborative relationship and team working practices among staff
members will enable the business to serve the client with advanced data analytical software to
examine data from all the area of their operations (Seifu, 2016). Physical evidence about client
details will be secured on website with password protection for security management.
Financing business & its revenue model
Every new start-up as well as established business needs enough money for survival.
Being a new start-up venture, entity will satisfy their capital need from both the own money and
using bank borrowing. It is because; borrowing will benefit the entity with tax advantage by
considering interest payment as a tax deductible payment. However, to the extent of investing
personal money, owner can minimize fixed burden because on the personal investment, entity
has no need to pay any fixed payments on it.
However, under the revenue model, it will collect revenue through the charges received
on delivering analytical software to the retailers. For driving more and more revenue,
personalized contact will be managed with the users so that client requirement can be properly
addressed by providing them unique analytical solution which will assist them in maximizing
sales, consumer base, frequency of visitors and profitability. As a result, they can establish
stronger presence with better competitiveness.
Globalization
Over the period, business can expand their presence in a globalized market through
establishing more branches outside London. By opening more and more branches outside
London, firm will be able to easily expand their operations at a worldwide place. In addition to
this, as it will render its analytical software solution to the authorized distributors therefore,
authorizing more and more dealers all over the world will definitely result in business expansion
and maximize user base, sales revenue and market share.
Despite this, with the growth of the business, big data analytical software can be
introduced targeting specially large sized retailers because their existing analytical solution
become obsolete and outdated and in the current times, they are looking for introducing a new
software by which they can evaluate large volume of dataset very easily. By targeting such
businesses, entity will be able to expand their operational scale and improve competitive
position.
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Organizing team to execute their idea
Personnel management gains extreme importance in the field of corporate world because
all the analytical solutions by which retailers will be served by our experts and professionals.
Sound workers management with perfect collaboration and competing working practices will
assist the planned business to serve client with the outstanding facilities. A short-training will be
initially provided to all the workers so that they can execute their operations successfully. It will
create sound coordination and cooperative nature among all the members. . In addition to this,
following equality without any discriminative practices will maintain healthy relationship among
workers at workplace. Support and assistance of seniors or superiors will facilitate all the staff
members to carry out their assigned duties in an effective manner. In case of any conflict,
disputes will be resolved by clear discussion among all the members. Such negotiation works on
managing good relationship between both the members.
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REFERENCES
Books and Journals
Albrecht, C. and et.al.,2016. Strategic revenue analysis. Strategic Direction. 32(7). pp.32-34.
Armstrong, G. and Kotler, P. 2005. Marketing: an introduction. Prentice Hall.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Luo, A., Roach, S. and Jiratchot, C., 2016. The effect of the 7Ps of the marketing mix on air
freight customer satisfaction and repurchase intention. Journal of Supply Chain
Management. 9(2).
Khodaparast and et.al.,2016. Evaluating the Components of Marketing Mix (7Ps) of Iran’s
Volleyball Super League. Annals of Applied Sport Science. 4(3). pp.35-40.
Yaghubian, S., Mahmoudi, G. and Tiji, M.J. 2016. Effect of marketing mix (7 Ps) on patients’
tendency to University and social security hospitals in Mazandaran. BIOSCIENCE
BIOTECHNOLOGY RESEARCH COMMUNICATIONS. 9(4). pp.776-782.
Seifu, S. D. and et.al.,2016. Cloud-computing: adoption issues for Ethiopian public and private
enterprises. The Electronic Journal of Information Systems in Developing Countries. 78.
pp.16-38.
Zott, C. and Amit, R. 2013. The business model: A theoretically anchored robust construct for
strategic analysis. Strategic Organization. 11(4). pp.403-411.
Online
Data analytics in the UK. 2017. [Online]. Available through:
<https://invest.great.gov.uk/us/industries/technology/data-analytics/>. [Accessed on 24th
October 2017].
PWC Global Data and Analytics Survey. 2016. [Online]. Available through:
<https://www.pwc.com/us/en/advisory-services/data-possibilities/big-decision-
survey.html>. [Accessed on 24th October 2017].
The Future of Retail Analytics. 2013. [PDF]. Available through:
<https://www.sas.com/content/dam/SAS/en_us/doc/research2/ekn-report-future-retail-
analytics-106717.pdf>. [Accessed on 24th October 2017].
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APPENDIX
Questionnaire
Name: _______
Location: _______________
Q1. How long you are working in the retail sectors?
 Below 5 year
 5-10 year
 More than 10 year
Q2. Are you familiar with the retail analytics?
 Yes, of-course
 No
Q3. Have you ever used any data analytics software to evaluate your critical business database?
 Yes
 Not yet
Q4. In the current changing world, are you thinking about using innovative analytical solution
for business in future?
 Yes
 No
Q5. Which type of retail analytical solution you want to use for your business?
 Descriptive
 Analytical
 Predictive
 Prescriptive
Q6. For what reason, you wish to use analytics in your organization?
 Sound reporting
 Robust data analysis
 Good reporting system
 Strategy formulation
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Q7. How extremely you agree that analytical solution will be useful in examining your critical
business database about each and every aspect?
 Extremely useful
 Moderately useful
 Not useful
Q8. Give us your valuable suggestions so that we can come up with a new start-up and provide
you the best analytical solutions____________________________________________________
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