CIO — Retailers think they know how business intelligence can help them improve sales, but many still struggle to use the technology effectively.

According to a study of 200 retailers by research consultancy Aberdeen Group, 71 percent already use or have plans to use business intelligence. The top benefits? Seventy-two percent says BI and predictive analytics are needed for more rapid response to consumer demand, followed by operational efficiency (noted by 67 percent), and the need to manage demand across multiple channels (cited by 52 percent).

The top three business strategies retailers intend BI and predictive analytics to address are improving customer service (48 percent), improving merchandising (39 percent) and improving lifetime value of customers and promotions effectiveness (tied at 36 percent).

But turning mountains of data into actionable information is no easy task. Almost half say dirty data was or is a primary obstacle to implementing business intelligence, and 44 percent have faced challenges dealing with data that was scattered throughout their organizations. Also tough: Getting the data itself. Thirty-six percent of respondents say they don't now or didn't used to have enough customer-specific information to generate valid results.

Companies cite several ways they plan to overcome these challenges. Fifty-nine percent are using or have used data cleansing projects to improve data quality. Forty-one percent say executives have to mandate change. And 39 percent are bringing in outside help or piloting small project to measure ROI.

Sahir Anand, an analyst with Aberdeen, says smart companies get top-level executive support and make clean data a priority. He believes business intelligence is a crucial tool for transforming the many sources of data into useful information. "Without business intelligence tools, it's going to be a lot of gut-feel decisions in terms of how you plan your merchandising strategy to fulfill customer demand," he says. "And that just doesn't work well."