Analytics in Consumer Durables IndustryRishabh Rai
Consumer durables companies around the globe are going through a phase of digital transformation. Many have successfully implemented a decision support system with the help of robust customer data management and its analysis. But still, a majority of these companies are looking backwards at their data, as what has happened rather than what will happen.
With this approach, they do not fully harness the potential that analytics solutions offer. With the application of predictive analytics in consumer durables, companies can make smart business decisions impacting their inventory management to supplier effectiveness, customer segmentation to increased sales and cost reduction to increase bottom lines. This shift can truly differentiate those in this industry as innovators and tread ahead of the competition.
In an ultra-competitive industry like consumer durables, the adoption of Business Intelligence and analytics will be the factor that will drive the company forward. Let’s look at some analytics use cases specific to different operations across consumer durables companies.
Marketing & Sales Analytics:
Today, companies have customers data, which they can leverage to view and evaluate, how their customers will purchase (omnichannel), what they will purchase (Product mix) and when they will purchase (predictive analytics). It has been enabled because of the information that these customers leave behind. Never has this purchase profiling capability been so conceivable as today.
Companies can leverage this information to model (predict) the consumer affinity for any particular segment of their offerings. Once they have this information the customers can be enticed with relevant offer either through email or promotional messages or in-store sales personnel to quickly close the loop.
Sales analysis highlights what products are trending across different retail stores. Insights from this exercise can drive the inventory and shelf space management decision. The power of the near real-time analytics allows more effective collaboration between sales, marketing and supply chain management.
Sentiment Analysis requires analysing a large amount of data generating in the digital space. Given the millennial’s propensity to update their social status and opinions with everything (from products they love to the advertisement that they didn’t like and why), it is a treasure trove to identify trends.
Promotion Channel Analysis can lead to insights on the channels that are working in favour of the consumer durables players. Basis this, a highly prioritised advertisement and promotional spend strategy can be formulated thereby improving returns from these campaigns.
Apart from all these benefits, an analytics solution can help decision-makers maintain visibility on primary, secondary & tertiary sales data with intuitive dashboards. It can also help them identify any cross-sell or up-sell opportunity and target accounts for amongst the customer base.
Efficient Inventory Management & Lean Supply Chain:
Efficient inventory management is critical for any industry because if the storage or opportunity cost attached to it. With analytics, consumer durable companies can identify an optimal inventory level. This will result in cost reduction opportunities across the whole value chain.
It requires organizations to consolidate data from ERP systems. With predictive analytics, a consumer goods provider can ascertain the demand by factoring in demand-supply economics. It can provide guidelines to vary safety stock levels, predict product shelf-lives, lead times and cycle times from the suppliers, and share-of-wallet for the different product.
Demand Forecasting is also very crucial for the businesses and can be done through analysis for historical sales data. With scenario analysis, the decision-makers can factor the impact on sales due to seasonality, any marketing or sales promotion campaigns or any competitors’ activity.
Analytics solutions can act as a true decision support system while making sourcing decisions. They can help reduce total delivery cost by evaluating and managing transportation profiles, outsourced partnerships and delivery types. Also, the platform can increase productivity associated with accurate receiving, picking and shipping, labour utilization and throughput velocity.
Financial analysis for P&L Management and Reporting:
With the help of analytics solutions, executive dashboards can be created, showcasing the metrics across the whole array of process and departments. With some simple drag and drop features, executives can play around with the data to add or remove parameters create a balanced scorecard for their business operations.
It takes immense effort from the Financial Planning & Analysis (FP&A) team to collate all the details cautiously and present a holistic picture of the business health. With the application of financial analytics solutions, the teams will not only achieve efficiency but will also be able to reveal hidden truths to support the company goals.
Keeping a timely check on the Account Payables (AP) and Account Receivables (AR) is very critical for consumer durable firms. It helps them keep a check on payment schedules and default risks against partners across the entire value chain.
An analytics platform collates all the information in one place, removes duplicity and creates a true image of the company’s financials. It can help identify trends & bottlenecks through scenario-based planning & budgeting. Also, with a comprehensive financial report generated through a BI platform, decision-makers can get a multi-dimensional view of aggregated expense across categories.
Workforce Optimisation & Skill Development:
The human workforce is a very integral and key element of any organisation. The information related to performance, compensation, leaves and others is recorded in every organisation. With analytics, this information can be put to use in driving strategic workforce-related initiatives to save cost.
Using analysis throughout the company, top and bottom performers can be identified and then moved up or down. This could be used to plan the organisation’s future spending on training and development of the workforce.
Compensation analysis can be done based on the appraisals and performance of the employees. It can help companies to create a fair and level compensation decision. Analysing the absenteeism and performance-related changes can highlight hidden behavioural patterns and can help in timely resolution of conflict to avoid attrition of key resources.
Streamline some other key Business processes with Analytics:
The product manufactured companies go through various stages before reaching to end customer. At each of these stages, a huge volume of information is extracted. This includes data from shipments (which tracks the journey from manufacturer warehouse to a distributor or retailer), sales information (at retailer POS), consumer surveys (collected on the field and consisting of qualitative & quantitative data), data when shopped online.
With predictive analysis built on these large and rich datasets, companies can deliver a significant impact on their bottom line. It leads to effective cost and pricing decisions across the entire product portfolios & channels and connects processes across the organisation like never before.
Consumer durables is an industry very close to customers because of the dependency on these products in everyday life. This makes the timely resolution of raised queries and tickets very easy. It gives rise to a separate customer service department. An analytics platform greatly helps the stakeholders in timely resolution of these tickets by flagging the outstanding queries after it crosses a certain threshold.
The analytics solutions help in benchmarking the company’s performance with market performance. It can reveal areas of improvement which would lead to enhanced category management practices to look at pricing, substitution, segmentation, and retailer/category performance using all available data sources for more complete and timely views of category market performance.
In light of dramatic changes in the consumer landscape, it has become imperative to track and predict customer behaviour more than ever before. Being able to gauge that with the help of the information they leave behind, creates an insurmountable advantage.
An analytics system can pinpoint areas of concern like product defect ratio, demand & supply pull, and much more, allows stakeholders in making winning decisions. It helps in the efficient management of raw materials sourcing and quality, optimizing inventory, and understanding margins over costs.
At Polestar we help you begin your analytics and digital transformation journey by analysing the areas of improvement. Our experienced consultants have helped companies deploy solutions that cut across departments and work as a true decision support system.