Turning Data into Intelligence

Retailers are realizing that using business intelligence (BI) technology to better understand customer buying behavior, to drive sales and profitability and to reduce operational costs, is a necessity for the long haul.

According to AMR Research, there are several factors at work for retailers when it comes to business intelligence technology. AMR's Retail IT Budget Study, 2004-2005, completed in partnership with the National Retail Federation, shows that 52 percent of retailers are looking to either add on to or replace their BI systems as part of their retail infrastructure strategies. In addition, an AMR quantitative assessment of broader, cross-industry BI spending confirms this trend, noting a 2005-2006 growth rate of 26 percent in spending on dashboard and scorecarding systems.

Retailers are examining specific functionality within BI software, including merchandise intelligence, customer intelligence and operational intelligence. One retailer taking advantage of business intelligence technology's enhanced reporting and analysis capabilities is CSK Auto, a specialty retailer in the automotive aftermarket, operating more than 1,280 retail stores. CSK expanded its use of MicroStrategy's technology to better assess corporate performance. Corporate management, business analysts and field personnel use MicroStrategy for analyzing consumer purchasing trends, reporting loss prevention statistics, monitoring vendor performance and compliance, and conducting detailed analysis of the sales, replenishment and purchasing functions.

Analyzing merchandise, inventory and sales data is a key part of business intelligence technology. Restoration Hardware, a multi-channel retailer of textiles and furniture, is combining Netezza Performance Server (NPS) system and the QuantiSense BI software suite to consolidate data into a central repository. As a result, the retailer can query data such as sales, inventory, merchandise hierarchy and geography to make informed decisions.