Grocery Analytics: 5 Ways To Inform Buying Decisions

Mega-chains and online retailers.

Those are only two of your competitors. There are also specialty markets, grocerants, ethnic markets, natural food stores, and even convenience stores. As an independent store owner, you cater to your community and know your customers by name.

But is that enough? Can you compete on price? Do you have the products new customers need? Tough questions; and without using data and analytics, you could fall behind.

This article highlights how your store can take advantage of grocery analytics to inform buying decisions, delight customers, and drive growth in your small business.

What Are Grocery Analytics?

Whether you’re a national supermarket chain or a local grocery store, grocery analytics offer insights you can’t ignore. And you don’t need to worry about feeling overwhelmed; modern point of sale (POS) systems have prebuilt reports to help you navigate the data.

You just need to use it.

Grocery analytics include sales, customer, product, and operational data. Once you can spot trends and use this data to inform buying decisions, your entire operation will run smoother. No more stockouts, wasted inventory, or unhappy customers.

For example, you can look at past sales patterns and predict future demand. Or look at customer purchase data to see what local residents buy more or less of. These insights help you make better decisions for your grocery store.

Your grocery store POS system is a goldmine of data — let’s look deeper.

#1: Pay Attention To Changing Trends

The best buying decisions for your grocery store depend on the specific needs of your community and target market. However, national and global trends always play a role in changing consumer demands.

For example, the Hispanic population will grow to 22 percent of the population by 2028, and Hispanic food is more popular in the U.S. than ever. Conventional grocers are stocking more Hispanic brands, and Hispanic grocers can seize this opportunity to provide authentic produce, meats, and other staples to a growing audience.

Baby Boomers and Millennials are both contributing greatly to spending growth, so noting their specific needs as a driving force in your buying decisions is a good idea.

#2: Anticipate Demand Using Your Store’s Data

Running analytical reports through IT Retail is a great way to stay attuned to the demands of your customers — both as a whole and as individuals. Using sales data, you can:

  • Effectively market to your local community
  • Stock the products they need
  • Offer fair but competitive prices

…and more. Data will reveal more over time. 

What are your busiest periods? Which days of the week see less foot traffic? Do customer preferences change with the seasons? With this data, you can make staffing decisions, pricing adjustments, and tailor your inventory.

Pro Tip: With IT Retail’s analytic reports, you can see top-performing products ( even within individual departments), measure the effectiveness of price adjustments, and view demand trends throughout the year.

Use Predictive Analytics To Forecast Demand

We’ve already mentioned looking out for trends and anticipating demand, but you can go one step further and predict demand. It’s an extra layer, but it helps your store stay ahead of customers.

For example, look at weather forecasts. Is your state expecting a particularly hot summer? It’s likely more people will host barbecues and outdoor pool parties. Consider upping your order of barbecue meats, seasoning, and tools to cater to increased demand.

#3: Create an Incredible Customer Experience

Consumers have more options than ever before. They can shop online and in store at small grocery stores, large chains, and specialty markets. Digging deeper into customer preferences will help you provide a unique and personalized experience.

Collect customer data and use it to:

  • Personalize offers and promotions: If you have customers who regularly purchase the same items, send them coupons so they can save on their favorite brand of coffee.
  • Develop marketing campaigns: Don’t send generic offers to everyone in your database. Segment and tailor your messaging to different groups. If one of your regulars often comes in with their newborn, offer them coupons for baby care products.
  • Improve your store layout and promotions: How do customers navigate your store? Try putting staples toward the back of your store to make the best use of your space. On the way, highlight promotions on endcaps — you might entice customers to try new products.

Last, use analytics to create a rewards or loyalty program. Let customers rack up points and redeem them for discounts and other rewards.

Pro Tip: The best grocery POS systems come with integrated customer loyalty features. 

#4: Improve Operations and Vendor Relationships

If you want to improve your supply chain and inventory management, lean on data. More importantly, connect your data along the supply chain. 

First, with real-time visibility, you can ensure inventory is accurate. Your POS system should update inventory levels every time a product is sold. Every time that product hits a threshold, you get an alert and can order more before you run out. This reduces waste and avoids overstocking.

Next, use grocery analytics to manage vendors. 

With supply chain intel, you can react quickly to delivery delays, changes in consumer preferences, equipment issues disrupting inventory, and more. You can also talk to vendors about lower order volumes on products that don’t sell well, and negotiate better pricing on products that fly off your shelves.

#5: Reduce Shrinkage To Increase Profits

Shrinkage is inevitable — two-thirds is caused by theft — but you can fight it in other ways:

  • Look at sales and transaction patterns to spot anomalies.
  • Track inventory in real time and look for discrepancies.
  • Forecast demand to minimize excess stock.

You can make better buying decisions when you can pinpoint where shrinkage is occurring. If excess inventory is the culprit, look at your sales data to see which items aren’t selling like you expected them to.

Related Read: [5 TIPS] How To Reduce Shrink in a Grocery Store

Choose a POS system with loss prevention features. You should be able to track inventory shrinkage and manage employee activity. Real-time tracking makes detecting fraud at the point of sale easier and prevents theft.

Getting Started With Grocery Analytics

If you’re wondering how to make the most out of grocery analytics, start with your POS system. Modern grocery POS systems have intuitive dashboards with reports ready to go. Even small stores can take advantage.

You might not have access to machine learning and AI-powered analytics, but POS systems provide reports like:

  • Daily, weekly, and monthly sales
  • Detailed inventory reports
  • Customer purchase data
  • Profit and loss reports

To make the most of your data, look for a POS provider with 24/7 support and robust training. 

Your concerns are valid; looking at reports might feel like you’re taking attention away from your store. But even if you don’t have a technical background, take advantage of user-friendly POS systems to utilize data and make buying decisions that will benefit your store in the long run.

Grocery Analytics: Future-Proof Your Grocery Store

You can’t rely on gut decisions to run your grocery store. Consumer behavior changes, competition intensifies, and more businesses are using data to make decisions — which means grocery analytics are an essential tool.

As mentioned above, a POS system is your best bet as a grocery store owner. At IT Retail, we offer a POS solution with built-in reporting and other essential features such as:

  • Automated inventory management
  • Integrated loyalty programs
  • Employee management
  • Self-checkout kiosk
  • Loss prevention features
  • Vendor management

…and more.

When it comes to building a future-proof grocery business, data points the way. See how IT Retail can help by scheduling a demo today.