CIO Review >> Magazine >> December  2013 Retail Technology Special issue

Retalon: Predictive Analytics Is The Future Of Retail

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Friday, January 24, 2014

Thomson Antony Winning in business depends on how prepared your company is to survive negative market conditions and profitably take advantage of consumer trends. By using predictive analytics, companies are now able to scientifically predict and control market conditions, thereby increasing the shareholder value.

Retalon, based in Toronto, ON, is among the market leaders in the business analytics field. Founded in 2000, the company's main goal is to bring accuracy for retail businesses by predicting and planning for the future. Deriving from the words Retail and Ètalon (perfect measurement), the company intends to offer solutions tailored for retail businesses.

Mark Krupnik, one of the co-founders of Retalon, having a strong academic background, wanted to create a truly integrated solution for retail businesses. Using predictive analysis, Retalon is able to help businesses planning all sides of their operations, optimize prices and markdowns, and ensure efficiency in supply chain and inventory management processes.

While there is a common misconception that predictive analytics is just a fancy name for forecasting or BI solutions, this technology is actually quite different and provides retailers tremendously valuable insight that they would not be able to achieve otherwise. Most providers of retail technology solutions utilizing analytics only focus on specific retail processes. For instance, such providers might focus solely on price management or on inventory management. While such analytics is valuable, it actually is a subject of numerous errors and exceptions that have to be dealt with manually. This happens because other related factors that come into play to determine future market conditions, customer behaviour and supply chain status that are not being considered. The proper way to use predictive analytics is to take all the possible influencing factors into account. "We see a lot of traction in specialty retail and in particular in fashion, jewelry and wine segments because these sectors of retail are very intricate and dynamic. We love complexity. The more challenging the retail environment is the more Retalon predictive analytics shines next to other solutions on the market," says Mark Krupnik, Ph.D, CEO of Retalon.

Currently, Retalon is claiming to be the only company in the world providing truly integrated predictive analytics with an all-round focus on the different aspects of retail business processes. This approach has been already adopted in a number of other industries and is definitely making its way to retail. According to Gartner, the solution that Retalon offers is a necessity for any retail business that wishes to thrive in the current competitive business environment. A recent Gartner report suggested that: "by 2016, 70 percent of the most profitable companies will manage their business processes using real-time predictive analytics."

Many retailers have been quick to embrace the superior business solutions offered by Retalon. Shane Co., the largest privately owned jewelry retailer in the United States is an example of such retailer who have benefited from Retalon's expertise. Using predictive analytics solutions by Retalon, Shane Co. reduced one its main product lines by 40 percent while increasing sales in the same product line by 20 percent. Follett Corporation, a $2.7 Billion retail and wholesale distributor of educational materials, used Retalon solutions to streamline their initial production phase and reduce the time involved in collecting data in the different business stages.

Considering the intellectual approach taken by the co-founders of the company (both with a solid background in academics and business), Retalon's solutions is a great option for retail business owners who want to take the guesswork out of the equation when it comes to running their businesses. While the current solutions are currently suited for medium to large retail businesses, Retalon is working on new initiatives that will bring predictive analytics to retailers of all sizes. Retalon works with the leading technology partners, such as IBM to combine the power of predictive analytics with IBM's latest developments in the areas of Big Data and cloud initiatives. Predictive analytics has never been a more exciting topic in the retail world, and Retalon's innovative approach has certainly captured lots of attention.