My business is a physical store, so why should I implement a data strategy at my level?

Even if your company is a brick-and-mortar retailer or an onsite service provider, a data-driven strategy can benefit your business. Data isn't just for e-commerce companies or tech stars, it can be useful to your business. When we talk about data strategy, we're not just talking about sales analytics. In fact, most brick-and-mortar stores already track their sales, which is an excellent practice that reveals trends such as peak purchases, favorite products, and so on. A true data strategy, however, is one that takes a holistic view of how your business operates, from inventory management to customer behavior to predicting future trends. The big players are already doing this, but it's entirely possible for a smaller company to implement such a strategy.
Here are just a few examples of how a good data strategy can be put into practice:

Improve operational efficiency

Data can help you identify inefficiencies in your operations, which can save you time and money.
Let's take a specific example that you're probably familiar with: Sales analysis. By analyzing sales data, you can better understand which products are selling well at what time of the year. This can help you manage your inventory more effectively. By understanding when these products sell best, you can plan ahead to ensure you have enough stock at the right time. Conversely, it can help you avoid overstocking products that don't sell, which can lead to wasted resources and financial loss. A strategy based on your sales data can lead to better cost management and an improved customer experience.

When it comes to transportation, data analytics can help you optimize your delivery routes to minimize costs and maximize efficiency. For example, by analyzing data on travel times, traffic, and distances between delivery points, you can plan routes that minimize time on the road, which can reduce fuel and vehicle maintenance costs. What's more, by optimizing delivery schedules, you can ensure that your customers receive their products at the most convenient time for them, improving customer satisfaction.

Customer Insight

A solid data strategy can benefit your business by improving the understanding of your customers. Customer data gives you insight into which products or services are most valued or least valued. It tells you who they are, their buying habits, their socio-economic profile, their preferences, and more. This valuable information allows you to target your marketing efforts more effectively and invest your marketing budget wisely.

With data, you can segment your customers into different groups based on the characteristics and behaviors you've identified. The ability to tailor your marketing and services to each customer segment improves the customer experience and increases customer satisfaction and loyalty.
Customer data reveals interesting points about trends and patterns of behavior. For example, if you find that customers often buy certain products together, you can use this information to create bundled promotions or arrange products in a way that encourages cross-selling.

Data-driven decision making

One of the great benefits of an effective data-driven strategy is improved decision-making. Fact-based decisions are always more accurate and effective than decisions based on intuition or personal judgment.
With data, you'll be able to make informed decisions about many aspects of your business. Analyzing sales and expense data can help you determine the optimal price for your products or services. Or, as we've seen, data about customers and their behavior can help you determine the best time to launch a promotion, sale, or marketing campaign. It can also help you decide how to place certain items in your store.
Taking your business ambitions a step further, data can help you make strategic decisions. For example, data on customer demographics and preferences can help you decide where to open a new store. Data on market trends can help you decide which new products to develop or which markets to target.

Forecasting and Planning

Data strategy can improve your company's forecasting and planning.
Your analysis of trends in your industry will give you insight into which products may become popular in the future, allowing you to adapt and stay competitive by offering them for sale.
Similarly, your analysis of past sales will help you forecast future sales. You can effectively plan your inventory, the employees you need to hire, the service providers you need to keep your business running smoothly, and other resources. Analyzing data on past costs also helps you plan your budget effectively.
Data analytics can also help you optimize your workforce management. For example, by analyzing data on peak and off-peak times, you can effectively plan your employees' work schedules. This ensures that you have enough staff during peak times while avoiding the unnecessary costs associated with having too many staff during off-peak times.
The information gathered from your data analysis also gives you valuable insight into the correlation between sales and workforce management. You'll be able to improve your team's results and reduce absenteeism by using data to optimize hours, schedules, and processes.

Innovation and Adaptation

Finally, a solid data strategy fosters innovation and adaptation. Data can help you identify new trends and market opportunities and stay competitive.
For example, if your sales and behavior analysis reveals products that are declining in popularity, you can innovate and update those products or replace them with new ones that are in demand.
Similarly, market trend data can help you identify new market opportunities. For example, if you see a growing trend toward eco-friendly products, you may decide to develop and sell your own eco-friendly products.

Although your physical business could theoretically function without a robust data strategy, to take it to the next level and expect steady growth, adopting such a strategy will give you a significant competitive advantage and improve many aspects of your business operations. Whether it's improving operational efficiency, understanding customers, making data-driven decisions, forecasting and planning, or innovating and adapting, data has the potential to transform your business and prepare it for the changes ahead.
Today, the use of data is increasingly becoming standard practice for companies of all sizes and in all industries. Data IQ advises and supports companies that want to succeed in their digital transformation in order to remain competitive. We can help you define how to collect, store and use your data for your personalized data strategy.