By Noah Balsam, Business Analyst Intern @ Enhanced Retail Solutions LLC

My internship with ERS has developed my understanding of the retail-manufacturer landscape and what constitutes success. I have studied several manufacturers in depth and learned how a company’s decision-making process can affect its growth potential. Specifically, I believe a manufacturer’s willingness to embrace analytics and ability to take risks is directly proportional to its ability to scale successfully.

Embracing Retail Analytics

Through my work at ERS, I have seen the benefits that come when a company fully commits to analytics. A manufacturer’s ability to forecast sales and predict inventory needs months in advance helps them understand the intricacies of their business that otherwise would go unnoticed. Instead of reacting after problems occur, they can make more proactive decisions, such as replenishment or product offerings.

I have also seen the challenges that arise when companies are slower to embrace analytics. In one case, a manufacturer was extremely hesitant to treat retail analytics as a viable strategy. That hesitation limited the company’s ability to understand its own performance objectively, and in turn, limited its growth potential. Without strong analytical visibility, manufacturers can end up relying too heavily on assumptions or subjective opinions about what should sell. Operating off of imperfect information often leads to poor buying decisions and difficulty building trust with retail partners.

Handling Risk

The second major factor is a manufacturer’s ability to take on informed risk. Growing a business involves making risky decisions before the outcome is guaranteed. However, risk does not mean acting recklessly. For a retailer-manufacturer partnership to succeed, important buying and management decisions should be based on sound data, not opinions alone. Understanding analytics makes risk more manageable by helping manufacturers track sales trends, inventory levels, and forecast changes.

Final Thoughts

Despite the importance of retail analytics to properly calibrate risk, creativity and subjectivity are still vital elements of the industry. Consumers still need to connect with a product emotionally and visually to ensure they are satisfied. Creativity, however, only becomes stronger when it is supported by data. Analytics helps ensure that people across the world get the exact products they want, when they want them. In that sense, a successful manufacturer doesn’t have to cast away their opinions and expertise to make informed business decisions. The best manufacturers use retail analytics in tandem with their knowledge of the industry to achieve maximum success.