Updated: Dec 27, 2022
The retail sector has a huge amount of data. Everyone knows or heard the terms Business Intelligence (business intelligence) and Advanced Analytics (advanced analytics). Often these terms are understood as synonyms. What is the difference between them?
Business analytics is a more classic type of analytics. It is based on the use of permanent data in the dimension of the past. Business intelligence methods are relatively simple - reporting, queries, OLAP (online analytical processing). This analytics can answer the questions - what happened? how many? how often?
Advanced analytics is an umbrella term that covers advanced modeling techniques, such as Data Mining, machine learning, forecasting, cluster analysis, simulation and others aimed at scenario development, optimal solution selection and risk analysis. This analytics can answer questions - why did it happen? What happens if trends continue in the future? What will happen in the future if you change the current one? what could be the best, worst, most likely?
Almost all retail chains have already implemented and use business analytics, but only in very rare cases they use the capabilities of advanced analytics. Advanced analytics has huge potential in retail, in areas such as assortment and promotional planning, personalized marketing, pricing and product management. The introduction of advanced analytics tools can significantly increase customer loyalty, sales and network profits, as well as optimize working capital. There are already many tools on the market.