Retailers must use algorithms for competitive advantage

In the new digital economy, retailers can best gain competitive advantage by applying of algorithms that reduce costs and grow top-line revenue, according to Gartner, Inc. Speaking at the Gartner Symposium/ITxpo in Australia last week, Kelsie Marian, principal research analyst at Gartner, said examples of algorithmic retail in action were emerging and yielding results for aggressive retailers.

“Retailers are some of the original data hoarders, using years of store-level sales data for demand planning since the mid-1980s, but what we see today is vastly different,” said Marian. “Retailers will survive only if quality data is embedded into every decision, minute by minute, across the retail organisation. But retailers can’t humanly scale to keep pace with growth of data, so a fundamentally different approach is necessary.” Gartner describes algorithmic retailing as the application of big data through advanced analytics across an increasingly complex and detailed retail structure, to deliver an efficient and flexible, yet unified, customer experience.