Brick-And-Mortar Retail Fighting Back with Data Integration
I’m reading more and more data integration articles within non-technical publications. The usual angle is the ability to leverage data you already have laying around to reinvent your business, or, to at least do business better.
For instance, this recent article in Ad Exchanger discusses the vast amount of valuable data that is sitting in brick-and-mortar retails stores that is just not being leveraged. “Retailers might look like they’re under siege, according to Gartner VP and analyst Andrew Frank, but they’re actually sitting on a pile of ‘underleveraged data.’ ”
As stated in the article, the University of Minnesota published a report demonstrating the causal relationship between search engine advertising and local in-store sales. The report documents the massive barriers to turning retail data into attributable marketing.
Clearly “[For retailers], having a ready-made approach to data integration is an important step in this direction.” Most retailers don’t leverage data integration platforms, and thus the data stays in silos either within corporate or at the stores themselves.
The end result lacks a few strategic advantages that on-line retailers typically leverage from data integration, including:
- The ability to track the effectiveness of ad campaigns. With the number of places you can spend your ad dollars, such as social media, pop-up ads, even traditional print publications, it’s important to see what ad dollars do the most good. You need the data from all the stores to make those assessments.
- The ability to track sales, and thus cost of sales. How much does a shoe store have to pay to sell a single shoe? If the cost of a sale is too high, then adjustments need to be made to maximize profitability. Again, data is needed from the stores.
- The ability automate processes, such as inventory management. Stores can run out of products to sell. Instead of having humans place the new orders, have automated processes watch inventory in the stores and reorder automatically. Other core processes can be automated as well.
Brick-and-mortar retailers finally see the value that data integration has to bring, and feel the increasing pressure from on-line retailers that typically have better visibility into their data. However, the adoption of data integration technology and approaches, married to a business intelligence and process automation strategy, does not come easily to businesses that are decades old.
To supercharge these efforts, many retailers have hired, or named, chief data officers. These are people charged with finding value in the data already stored, as well as outside data that they can mashup with operational data to make core decisions. This scope includes everything from dropping a product line, to simply reordering inventory to keep up with a trending increase in demand.
The value that data and data integration can bring to the retail space is huge. While it’s taken many years, and unrelenting pressure from on-line retailers, brick-and-mortar retail stores could find that using data effectively keeps them in the game.