Early adopters of latest trend analysis technology see sales
rise during key trading period.
Retailers using business intelligence systems with the latest
trend analysis have reaped the benefits with higher sales during
the Christmas trading period, according to retail IT analysts.
Several major retailers have reported strong sales for the
Christmas period, including Tesco, J Sainsbury, John Lewis, Marks
& Spencer and DSG International, which owns Dixons, The Link
and PC World.
Tesco, which reported a bigger increase in like-for-like sales
than other supermarkets, attributed its success to "product
availability".
Retailers' business intelligence systems are integrated with
point of sale systems to show what transactions have taken place
and enable trend analysis.
Nigel Montgomery, director of European research at AMR Research,
said, "Trend analysis really gives you power. As time goes on, you
get more and more intelligence as you get smarter. The early
adopters of those systems are the ones that see the benefits."
Gartner analysts Jeffrey Roster and Hung LeHong said, "Virtually
every major retailer will update forecasting technology in the next
two years. Emerging tools, such as pricing and promotion
optimisation and market basket analysis, represent efforts to
provide the required analytics.
"Operational excellence is no longer a differentiator.
Significant investments in databases, software suites and
infrastructure by forward-looking retailers have set the stage for
a giant step forward in improving capabilities."
Massimo Franzese, a consultant at Leadent, said, "Business
intelligence software makes sales and markdowns more
effective."
However, most smaller UK retailers have yet to deploy the latest
business intelligence systems, said Franzese, let alone the radio
frequency identification technology that Marks & Spencer and
Tesco are using to enhance the data in their systems.
M&S is expanding its RFID roll-out to 53 stores. It intends
to tag items of clothing to ensure it manufactures sufficient
quantities of the most popular garment sizes in each range.
Tesco has successfully trialled RFID systems and had planned to
use RFID tagging throughout its business by the end of 2005, but
now expects to have a full implementation later this year.
Ovum senior analyst Alice Woodward said the financial services
and retail sectors were leading in the deployment of new business
intelligence software, but it would be increasingly deployed across
all sectors in the coming year as mid-sized firms begin using the
software to gain a business advantage. "Business intelligence
drives competitive edge," she said.