ANLY FPX 5510 Assessment 1 Pier 1 Imports ANLY-FPX 5510 Advanced Business Analytics
Introduction
Pier 1 Imports was founded in 1962 as Cost Plus Imports by Charles Tandy and Luther Henderson, who was also the treasurer of Tandy Corporation, the company that owned Radio Shack (Light, 2020). By 1966, the store rebranded as Pier 1 Imports, specializing in selling exotic home furnishings and unique items from India and Southeast Asia (Light, 2020). Initially, Pier 1 attracted a niche market of 1960s counter-culture customers with products like elephant-base side tables, woven wall hangings, and Papasan wicker chairs. In 2002, during its 40th anniversary, the company launched the theme “From hippie to hip,” but today, it struggles with severe financial difficulties (Light, 2020).
Analysis
Data analytics, often referred to as business analytics, is a process that uses data to answer questions, identify trends, and extract valuable insights that can drive decision-making (Bowerman et al., 2019). Descriptive analytics focuses on summarizing historical data using methods such as tables and graphs (Bowerman et al., 2019). Pier 1 Imports, along with other major retail chains like J. Crew, Macy’s, and Barney’s, was already facing financial challenges before the COVID-19 pandemic. According to The New York Times, Pier 1 failed to engage with Millennial customers, did not have a robust online presence, and made unsuccessful attempts to modernize its stores. Its rapid, resource-intensive three-year turnaround plan worsened the company’s financial position, causing it to suffer negative earnings and liquidity issues (Light, 2020).
Diagnostic Analytics
Pier 1’s downfall was not solely due to the pandemic; it was a culmination of long-standing brand mismanagement and failure to adapt to changing market dynamics. The company made critical errors in its marketing strategies, such as misjudging its target audience and not adapting its product offerings to appeal to younger consumers. Its three-year turnaround plan backfired, as the misalignment of strategy and customer expectations led to the brand’s collapse. Analysts doubt whether Pier 1 will successfully emerge from bankruptcy (Light, 2020).
Table: Descriptive, Diagnostic, Predictive, and Prescriptive Analytics
| Analytics Type | Description | Pier 1 Application |
|---|---|---|
| Descriptive Analytics | Summarizes historical data through charts, graphs, and tables (Bowerman et al., 2019). | Pier 1 did not modernize its offerings nor attract Millennials (Light, 2020). |
| Diagnostic Analytics | Explores reasons behind trends, focusing on why events occurred (Bowerman et al., 2019). | Pier 1’s failure was due to mismanagement of brand strategy and failure to connect with key audiences (Light, 2020). |
| Predictive Analytics | Uses data models to predict future trends or events (Bekker, 2019). | Pier 1 was already declining before COVID-19, and recovery is unlikely (Light, 2020). |
| Prescriptive Analytics | Suggests actionable strategies based on predictive models (Bekker, 2019). | Management eventually recognized the misaligned value equation and targeted new customer segments (Light, 2020). |
Conclusion
Competitive advantage is essential for any business to thrive. Pier 1 Imports failed to adapt its business model, engage with new customer segments, and modernize its retail strategies, leading to its downfall. Data analytics could have helped Pier 1 avoid many of these mistakes by providing actionable insights. Advanced analytics allow companies to reduce costs, target customers more effectively, and identify trends that could improve performance. To remain competitive, businesses must continuously evolve, using data analytics to drive decision-making and maintain market relevance.
References
Bekker, A. (2019, May 14). 4 Types of Data Analytics to Improve Decision Making. ScienceSoft. https://www.scnsoft.com/blog/4-types-of-data-analytics
Bowerman, B. L., Drougas, A. M., Duckworth, W. M., Froelich, A. G., Hummel, R. M., Moninger, K. B., & Schur, P. J. (2019). Business statistics and analytics in practice: Using data, modeling, and analytics (9th ed.). New York, NY: McGraw Hill.