How better data serves the four value drivers in retail
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Stibo Systems is a Business Reporter client.
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The “new normal” is now old news. That is the problem with some of these in-the-moment sayings that we hear from retail leaders – they have a short shelf life.
But one aspect of the new normal that was very helpful was the strong upsurge in demand, whether it was online, instore or omnichannel. Two years later, retailers are facing a new reality where global sales are now in the 3 to 5 per cent range for the foreseeable future and inflation is driving all or much of the growth.
Now retailers have a new plan. Many of the omnichannel capabilities, supply chain delivery and digital touchpoints have been built to meet the consumer’s need for the product now and wherever they need it. In this year and over the next few, retailers will be moving beyond the typical commerce strategies of better assortment, new categories or more stores. Market share may prove a less important metric, as retailers double down on their existing customers, focus on their needs and deliver services along with physical products to increase customer share of wallet.
How might retailers use data to grow and improve in the future? There are four value drivers that will condition this – and data is a strong component and key enabler of all of them.
Operational efficiency
The need for retailers to execute flawlessly has remained, and, with more consumer touchpoints, the bar has been set higher. Increased costs from suppliers and the constrained market for talent is putting pressure on retailers to learn how to manage operations and business data more efficiently. Two areas that remain daunting in terms of resources are supplier and product onboarding as well as omnichannel execution.
When new products are onboarded to a vendor, they come with a tremendous amount of data which the retailer must also deal with, data which varies by category, quality and the vendor it comes from. Future-ready retailers can streamline this process and define digital-only business rules that enable high quality vendor data into their databases.
Interconnected with product onboarding is supplier onboarding, which is the process of bringing a new supplier into your organisation’s supply chain. Retailers are not only expanding their supplier base for more product variety but also building resiliency and redundancy by having multiple suppliers for key items.
Omnichannel execution depends on having data quality steps in key processes and data governance deployed to ensure the data is ready for applications, and that the data for your customer facing digital channels are being fuelled by a single source of truth. Strong data governance demands accurate data on packaging hierarchy and complete dimensional data, and assists logistical execution by minimising costs caused by product damage or errors in shipping. By deploying these two strategies of effective onboarding and omnichannel execution, retailers can reduce the repetitive work and enable data teams and functions in the organisation to be more productive and make better decisions.
Growth and transformation
In a data-empowered digital world, retailers create differentiation by solving customer problems, and these problems are most likely related to digital commerce. E-commerce continues to outpace physical retail in sales, but is expected to slow to single digits in the next year. Retailers with flattening e-commerce sales are launching new commerce channels such as live and social commerce and experimenting with emerging channels such as the metaverse.
Retailers are also diversifying revenues with services and enhancing their marketing programs to reach the digital consumer with retail media networks.
Retailers that have been working with primarily a few digital channels and brick-and-mortar retail need to be more agile and require more robust product management capabilities to manage all different hierarchies and share to an expanding array of distribution points. With a modern SaaS-based data management solution and syndication exchange service, retailers will be able to ensure they are agile enough to be future-ready, and able to expand to digital channels and engage in a more meaningful way with customers.
Future customers will not only be sourced from B2C. Retailers can also generate incremental business if they build the marketing, merchandising and data sharing capabilities for B2B businesses development. Retailers can increase their reach by partnering with other retailers, creating curated experiences such as store-within-a-store assortment offerings which are relevant to a partner retailer’s new customer segment and/or new markets.
Compliance and sustainability
Regulation expansion has been a common fact in almost every market. The expectation is that governments will continue extending their regulatory requests in regard to customer data protection, product information or supplier compliance.
Retailers will need to deal with multiple and diverse regulations that affect the way they capture, update, manage and delete customer information, in a context where customer data is exploited and used in multiple applications (such as CRM, marketing tools, loyalty programs and customer service). Product data related to ingredients, components, materials, safety conditions, shelf-life, origins and more must be transparently shared with customers using various formats and standards according to the market.
Sustainability-supportive laws are also emerging, with different intensity claiming for visibility and traceability to support circular models. To deal with complex localised regulations, it is imperative for retailers to set up strong data management and governance capabilities able to evolve and cope with future needs.
Employee and customer experience
One of the best definitions of retail is “a business of people serving people”. No matter how far digital retail goes, it is still about people (employees) serving people (customers). Retailers can make life easier for employees and customers alike, and elevating their experience will definitively shape their ability to grow as they will grow loyalty and bring in new customers. The “how” of this is the real challenge, and needs to be translated into a set of multiple and co-ordinated actions. Transparency in products and services information, well governed and efficient merchandise processes, accurate customer information, pertinent communication and agile channel management on the foundation of strong data management capabilities will create the difference in terms of experience.
If data-as-a-service (DaaS) is added to the equation, to serve “as you go” or “as you require” needs of customer or employees, the experience is multiplied by the “they care for me” factor, which makes it memorable.
There are multiples angles and use-cases where master data management (MDM) turns out to be key to supporting key retail value drivers. Having a one-stop-shop solution for MDM capabilities that supports all major data domains – product, supplier, customer, location, employees, etc – leverages the connection between them and ensures an agile connection to all data sources and consuming applications, significantly raises ROI in terms of different business use cases and reduces the endemic complexity of many big retail corporations.
Learn more about why Stibo Systems Master Data Management is a key enabler of retail success.