Data. It’s a word that’s been impossible to ignore lately. For many small business owners the idea of “harnessing data” seems unnecessary — a high-tech solution that’s more at home in large corporate offices with hundreds of employees.
We’re here to tell you that’s not the case. Every time you rack up a sale on your point of sale (POS) system, it’s generating incredibly useful data — data that independent supermarkets and grocers around the country are using to stay competitive, optimize pricing, and more.
In this article, we’ll tell you everything you need to know about supermarket data analytics, including:
- What they are
- Practical ways you can use analytics in your store
- Top providers based on your size and needs
Let’s get started.
What Are Supermarket Data Analytics?
Data analytics are the tools businesses use to categorize and analyze various types of data in order to make more informed decisions. Specifically, analytics tools can help visualize data as well as uncover trends and correlations that might not be immediately apparent.
While this might seem high tech for the grocery and supermarket industry, you’d be surprised at how much usable data the average supermarket generates on a daily basis.
A modern POS system is constantly collecting useful data, such as:
- Customer contact information and buying history
- Sales data (by amount, time of day, product type, etc.)
- Average basket size
- Peak hours
- Inventory statistics (churn rate, supplier turnaround, stock levels, etc.)
- Promotion and discount performance
By plugging this data into a supermarket analytics and reporting solution, you can start to gain insights on how to optimize your store.
4 Examples of How Data-Driven Decisions Can Boost Your Supermarket Profits
Understanding how supermarket data analytics work at a high level is all well and good, but let’s see it in practice.
Here are four examples demonstrating how supermarkets are using data analytics to streamline their processes and boost profits.
1. Understand Customer Data for Demand Forecasting
Customer preferences ebb and flow, making it hard to anticipate what to stock at a given time. While we’d all love a crystal ball, demand forecasting is the next best thing.
Demand forecasting is when retailers use historical data (sales, seasonal activity, etc.) to identify trends in customer behaviors. For example, maybe during football season, you see a spike in sales of snack foods and beer — or during cold weather, you see increased sales of soups and teas.
While these are basic examples, using demand forecasting may uncover some customer behaviors you weren’t aware of. By identifying consistent trends, you can better prepare for what were once unpredictable shifts in demand and optimize your inventory levels.
2. Improve Selection and Personalize Your Marketing
Discounts, coupons, and customer loyalty programs are all classic retail strategies to encourage repeat business and upselling. However, experts agree that generic discounts aren’t as effective as targeted advertising. So, how do you personalize your marketing while keeping costs down?
That’s where supermarket data comes in. Use your sales data to get an overview of your bestselling items, top product categories, and even best-performing areas of your store. If you have a customer loyalty program, see what your most loyal shoppers buy frequently.
This data helps you in two ways. First, it shows what products and services your customers care about the most, which will help you make better decisions about stocking and store layout.
Second, you can use individual customer data to tailor discounts and promotions directly to their preferences. For example, maybe your sales reports show that you have a distinct segment of customers who frequently buy prepared meals from your deli section. Send these customers a buy one get one (BOGO) offer or a discount for prepared meals.
3. Reduce Overhead by Optimizing Staffing
Nothing is more frustrating than going to checkout only to be faced with a long line because the store is understaffed. That situation is not only bad for customers, but it’s stressful for your team — and stress is not ideal for retaining employees.
Instead of making guesses based on intuition, use data to plan your shift schedules and seasonal hiring. Your POS system can measure when your busiest times are (as well as your slow periods). Using those numbers, you can adjust the number of staff accordingly.
While not foolproof, using data reduces your chances of being chronically under or overstaffed. For long-term needs, historical activity data will also clue you into your busy seasons (which vary from store to store based on the local community). Maybe a local art festival or cultural event consistently leads to more business at odd times of year — prepare by hiring and setting schedules well in advance.
4. Fine-Tune Your Pricing Strategy
The rising price of groceries is a common complaint lately. However, we understand that much of that is out of your control, and operating costs and profit margins at supermarkets remain thin.
Some supermarkets throw up their hands and do blanket price increases to counter the rising price of goods — but that’s never popular with customers. So, what can you do to improve your financial health while keeping customers happy?
Use supermarket data analytics to take a strategic approach. Look at different product types and customer segments to consider things like:
- What products are selling best?
- What types of inventory are moving quickly and what’s lingering on the shelves?
- Are certain customers willing to spend more on premium brands?
- What are the profit margins for different products?
Combining this data with information on competitor pricing, you can make adjustments to individual products or product categories that strike a balance between profits and consumer value. 
Supermarket Data Analytics: 3 Top Providers
Data analytics is used in almost every industry, which has led to a rise in industry-specific analytics tools. That doesn’t mean that every supermarket-specific tool will be a good fit for your business.
Here are three of our picks for supermarket analytics providers based on the types of reporting they offer and the size of your business.
1. IT Retail
IT Retail is our top-rated grocery and supermarket POS system. We offer growing supermarkets a comprehensive solution that includes built-in reporting and analytics, advanced inventory management, and a user-friendly POS interface.
Area of Focus
POS system with integrated sales data, demand forecasting, and inventory reports for small to midsize grocers.
Standout Features
- Grocery-focused and historical reporting: Designed reports are specifically built to be easy for supermarkets to use. See your store’s performance quickly on a user-friendly dashboard that is accessible on any device.
- Multi-location support: Identify industry-wide as well as location-specific trends, so you can optimize your pricing and processes for different locations.
- Ability to export data: Easily export report data to other tools like QuickBooks and Excel.
- All-in-one supermarket solution: In addition to customer-tested reporting tools, IT Retail is a comprehensive solution for supermarket operators including a modern POS system, scale integrations, inventory management, and e-commerce support.
Pricing
IT Retail has flexible pricing tiers based on your needs. Use our convenient pricing configurator tool to learn more.
2. Dor
Effective store layout has a major impact on how your customers perceive your brand and spend money. Dor specifically focuses on measuring how your customers move around your store, interact with displays, and how that translates into conversion rates.
Area of Focus
Location-based data analytics using physical sensors at any size location.
Standout Features
- Battery-powered thermal sensors: Dor uses proprietary peel-and-stick sensors to measure customer activity. Their sensors use their own network and machine learning to give accurate head counts and location-based information.
- POS integration: Dor’s software integrates with your POS system so you can compare location data against your sales and inventory reports.
- Accurate conversion rates: A POS system with built-in reports won’t be able to track information about customers who didn’t buy anything. Having in-store customer data will give you insights into the customers who came in and didn’t find what they were looking for.
Pricing
Dor’s plans are $99/month or $89/month with an annual subscription.
3. Invafresh
As supermarkets grow to multiple locations, staying on top of the data at each location can be a challenge. Invafresh focuses on large-scale grocery operations so decision-makers who can’t be in every location can still get the insights they need to succeed.
Area of Focus
Robust, AI-powered data analytics for national, enterprise-scale supermarket operations.
Standout Features
- Enterprise-scale solutions: Invafresh’s data analytics are designed to help c-suite executives and specialists gain insights into store performance.
- Specific transparency reports: As supermarket operations scale, there’s a greater need to maintain industry compliance. Invafresh comes with operational reports on food waste, overstock, recalls, and other food traceability issues.
- In-depth operational reports: Invafresh allows its users to identify individual store performance, down to individual departments, to find areas for improvement.
Pricing
Invafresh does not list pricing information on their website. Contact their sales team for more details.
Use Supermarket Data Analytics To Improve the Customer Experience
Data analytics may seem like something out of a sci-fi movie — a cold, inhuman method for measuring productivity and performance — but that couldn’t be further from the truth. Supermarkets of all sizes are using analytics and reporting tools to gain actionable insights to improve the way they serve their customers.
If you’re thinking of using data to improve how your supermarket operates, start with a partner that understands your needs. IT Retail has decades of experience working with independent grocers, supermarkets, and food retailers, helping streamline operations so they can focus on their customers.
Based on extensive customer feedback, our reports aren’t built to overwhelm you with data points but provide actionable information that’s actually useful for supermarket owners and managers.
Schedule a free demo today to learn how IT Retail’s supermarket data analytics can drive sales, boost productivity, and enhance the customer experience.
