17 August 2011, Johannesburg
Appeared in SpyGhana:

Market changes in the local retail industry are undoubtedly bringing about increased competition to this sector. These companies now need to think differently about their business models and use tools such as Business Intelligence (BI) to effectively compete. This is the sentiment of PBT.

Says Martin Rennhackkamp, COO of PBT; “The local retail industry is currently experiencing some significant changes that have not only shocked South African retailers, but have created a sense of worry – with many questioning their ability to complete against global industry giants.”

A recent report by PwC & TNS Retail Forward*, indicates that the retail industry is becoming more complex and is changing at an alarming rate. Continues Rennhackkamp; “The reality is that today, retailers are faced with aspects such as continuously changing demographics and the fact that the new consumer is indeed king. The consumer holds more power than ever before and local retailers now need to start thinking about meeting their every need, effectively, efficiently and on a global scale.”

Take for example global retailer Wal-Mart’s plan to buy a controlling stake in the South African retailer Massmart. Wal-Mart’s entrance into the retail space will undoubtedly have a profound impact on the local retail sector and their ability to remain competitive – especially considering that Wal-Mart’s value proposition of offering the consumer what they want at a price that suits them.

Continues Rennhackkamp; “For local retailers to survive against such competition, they need to invest in BI now. Through BI, local retailers can turn everyday data into valuable information. This will allow them to not only effectively manage their logistics and supply chain – ensuring that wastage is kept to a minimum and costs are minimised as efficiencies increase, but also to understand their customers’ buying behaviour and patterns. This means that they are able to fully understand the consumer and their needs and since, costs are reduced and processes are streamlined, they have the operational flexibility to meet these needs. These are all key elements of remaining successful in such a cut throat environment.”

BI can further assist local retailers in identifying gaps within their supply chain. Through this identification, rectifications can be made and corrective measures put in place to ensure that the supply chain is fully operational and therefore economical. Essentially, BI provides retailers with access to the right information their business needs, at the right time, allowing for the right business decisions to be made.

It’s no secret that BI has been bandied around extensively as so many organisations in the past have failed to implement and see the benefits that BI has to offer – due to a lack of knowledge of this practice. BI today is more than just a buzz word or a dashboard tool to integrate data. It is a tool that turns data and information into a useful asset – from identifying and managing business risk to anticipating internal and external opportunities in organisations. This can create a clear competitive edge and stimulate innovation against market change and competition.

Concludes Rennhackkamp; “Considering the current dynamics the local retail industry is facing, as well as the fact that the retail sector will experience increased change in the next few years, it is evident that retailers should be turning to BI as a business critical tool for continued growth and future viability. Investing in BI now is a crucial step in ensuring that SA retailers can effectively compete against global giants – those currently entering and those who plan to enter the local space.”

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