Table of contents:
- ABC and XYZ Analysis: Retail Insights for Your Chain
- Sales Analytics in Retail: Effective BI Toolset
- Business Intelligence Solutions in Retail
- Conclusion
With the evolution of retail, managing assortment and analyzing sales in stores have become significantly more complex. In the past, a small store owner could personally know all customers, handle orders, work with suppliers, analyze sales performance, and control all aspects of inventory. However, this is nearly impossible in today's environment without specialized tools such as BI dashboards, data visualization tools, advanced Business Intelligence solutions like Tableau, Power BI, Datawiz BI, and AI/ML-based analytical platforms.
ABC and XYZ Analysis: Retail Insights for Your Chain
Overall, a modern approach to optimizing a store's assortment includes:
- Systematic tracking and analysis of sales
- Effective management of the product matrix
- Optimization of supplier relationships
- Rational inventory management
Making strategic decisions, such as removing products from the assortment or introducing promotional offers, requires a deep understanding of internal insights, chain specifics, and thorough data analysis. Specialists in assortment optimization typically employ a comprehensive approach to obtain high-quality sales analytics.
Cross-analysis (ABC analysis and XYZ analysis) has become a standard tool for analyzing store sales and gaining insights into retail for making critical decisions. This, in turn, allows for effective work with dashboards, other data visualization tools, analytical platforms, BI solutions, and more.
Sales Analytics in Retail: Effective BI Toolset
ABC analysis is a standard method for studying assortments that allows you to determine each product’s contribution to a store’s turnover and profit and to categorize products for effective assortment management.
XYZ analysis assesses the stability of product sales over a specific period. The results help categorize products, determine optimal placement in the warehouse, monitor stock levels, and optimize the supply process.
Combining the results of ABC and XYZ analysis is a popular method of sales analytics. While ABC analysis helps evaluate each product's contribution to the sales structure, XYZ analysis allows for an assessment of sales stability. Using a cross-approach, you can clearly define each product's place within the assortment, store, or entire chain.
These insights can be leveraged using tools such as:
- BI Dashboards
- Data visualization tools
- AI/ML-based analytical services
- Business Intelligence solutions
Additionally, cross-analysis of product sales across a chain provides extra benefits, such as identifying products with stable sales that are critical for the store's or chain's turnover and identifying loss-making items. It also allows for increasing the share of profitable products without violating the principles of assortment formation.
Business Intelligence Solutions in Retail
It's important to note that ABC and XYZ analysis and their combination are only possible with accurate inventory turnover and sales statistics tracking. This is achievable only with modern Business Intelligence (BI) solutions that ensure the creation of dashboards and reporting.
Implementing AI/ML-based analytical platforms allows for practical analysis of product sales in stores, which is crucial for retail chains. By gaining valuable insights, you can make well-informed business decisions. The main goal of leading BI platforms like Tableau, Power BI, or Datawiz BI is to simplify the analysis of key metrics in real-time and ensure effective business analytics.
Understanding the entire product matrix, evaluating sales efficiency (thanks to ABC and XYZ analysis), and using a BI platform ensures competitiveness in retail. However, it is essential to remember that a high-quality product assessment is only possible with appropriate BI services.
Conclusion
ABC and XYZ analyses are the foundation of sales analytics in retail, as they allow for the assessment of each product's contribution to turnover profit and sales stability. Their combination provides a comprehensive view of product efficiency, enabling informed decisions regarding assortment management. The insights gained help identify stable and profitable products, optimize supply processes, and determine products that should be removed from the assortment or promoted through marketing campaigns. This contributes to improving store efficiency and overall competitiveness in retail.
At the same time, achieving high efficiency without using Business Intelligence (BI) solutions is virtually impossible today. BI ensures systematic tracking, data analysis, and support for strategic decision-making based on a deep understanding of the business. Tools such as dashboards, data visualization tools, and AI/ML-based analytical platforms enable quick processing of large amounts of information and convenient presentation for operational decisions. For example, solutions like Datawiz BI greatly simplify assortment management and contribute to increased sales and overall business productivity.
