Today, business intelligence looks quite different than it did in decades past. While complexities have always existed in the management of areas such as assortment, pricing, supply chain logistics and marketing campaigns, the rise of ecommerce and data analytics has rendered business insight limitless while, simultaneously, making total business control more difficult. These complexities have resulted in the evolution of many Merchandisers into Merchant Scientists – empowered to comb through the data and obtain answers to valuable questions.

Our Co-founder and Chief Scientist, Michael Ross, points out that a typical retailer will easily generate 100 million data points a week. That might seem impossible, but picture this: you’re a retailer with 500,000 customers, 20,000 products and 50,000 marketing campaigns. Given all the possible combinations of interactions and touch-points, the number is easier to hit than you might think.

To handle this massive influx of data, many traditional business decisions are now run by automated software using algorithms to drive intelligence from digital data points generated by consumers and business activities. The value that such platforms offer to businesses comes out of decreased time to take profitable actions. Additionally, in the long run, the reports these systems provide allow technical and operational executives to constantly enact strategic and structural changes to compete more aggressively and drive growth.

It is essential for executives to maintain control over their data while letting technology do the heavy lifting, as opposed to becoming complacent and letting the systems make all of the decisions. Advanced reporting through data analysis needs to become an essential part of Merchant Scientists’ toolkit. When managed appropriately, these reports explore metrics, drive the right conversations and lead to successful actions.

As a retailer, you are probably familiar with the multitude of reports coming from all parts of the organization. All reports have associated, independent metrics that can be looked at over time to get a sense of the scale of opportunity and whether things are getting better or worse. Making sure you know how to collectively analyze and learn from the aggregated knowledge is critical to success in the modern retail landscape.

Although many business leaders know the answers they want from their data, they often don’t know the right questions to ask. After developing a proactive relationship with your data, you should establish what information you intend to assess from it. There a few questions you should be asking, taking into consideration the behavior of today’s digital enabled customers. The following is a an organized break down of a set of questions from Ross.

The tactical reports:

• Which products are not being viewed (metric: inventory value not viewed)?
• Which products are being viewed, but not purchased (metric: inventory value viewed - not sold)?
• Which sold out products are still receiving views (metric: number of views of sold out products)?

The weekly questions to ask:

• Are our bestsellers consistently in stock (metric: demand-weighted availability)?
• What is the customers’ experience with product availability (metric: view-weighted availability)?
• Which products are overexposed or underexposed (metric: profit per product view)?

Strategic questions to ask:

• Which products do high value customers regularly purchase on their first visit?
• Which products are addictive (i.e., get frequently repurchased by the same customers)?
• Where are we systematically missing opportunities on fringe sizes?

As consumers continue to change the dynamics of retail, answering these questions allows you to respond to their needs in real-time. Answering these questions through your data will allow you to pivot and react – offering the products your consumers want, where they want them – avoiding losses and increasing sales.

The lesson is clear: be precise in establishing your business intelligence goals. Ask questions of your data that lead to actionable results. Remember that people are the foundation of your business – on both the supply and demand side – and numbers capture each one of their needs, not just the average. Take advantage of automation, but stay human. All of this will lead to smarter business decisions, more profit and long-term growth for your organization.