Retailers often face a vicious cycle of combining and analyzing reports from prior weeks in an effort to answer questions that continually surface week-over-week. This distraction, in both time and effort, pulls teams away from focusing on strategic initiatives that align with business goals and the ever-evolving needs of their customers.
There is a way to solve the endless analysis and repetitive patterns however, by pinpointing disconnects and connecting data. Data silos are no laughing matter, and can potentially create a domino effect where all parts of the business are so isolated that attempting to rationalize them is simply impossible.
Retailers and merchandisers who are data-driven and interconnected not only gain the ability to solve their problems, but have the capacity to create a bigger picture in which they can measure themselves against the competition and highlight key differentiators.
Let’s take a step back to look at some (all too typical) fundamental issues that begin to emerge for retailers and merchandisers during a typical week:
The Ripple Effect
Merchandisers typically spend the first part of the week building and collating reports. However, with all of the systems a retailer has integrated into their enterprise (Analytics, CRM, Bidding Systems, BI, Data Warehouses, Big Data), the unfortunate by-product is a corresponding increase of disparate reports. The goal is to create one holistic view of performance (from a blur of spreadsheets) in order to ask questions of data gleaned from the piles of reports. However, what typically occurs is those questions only beget more questions, creating a ripple effect of confusion and lack of unified direction.
Hail Marys or White Flags?
The latter part of the week is spent trying to understand the problems, why they arose and how to resolve them. Without connected systems, each department ends up executing on their own goals and often lack the resources to truly interconnect with each other. By Friday, merchandisers have two options: 1. Make last-minute decisions to try to eliminate problem areas for the next week—a Hail Mary; or 2. Admit defeat and hope the problems disappear on their own—a White Flag. Neither of these options provide real answers to ongoing issues.
However, there is a light at the end of this dark data tunnel. Once merchandisers are empowered to connect siloed systems and data, they can begin to understand performance metrics with a 360-degree view. Simply put, merchandisers are handed a “roadmap” to correct the issues at hand. They identify actionable opportunities early on in the week to take advantage of the “low hanging fruit” and solve immediate issues (such as continuing to advertise out-of-stock products(. To help prioritize these opportunities, merchandisers should ask themselves key questions, such as:
- How much inventory is not getting viewed on the website?
- What percentage of High Value/Most Profitable customers return products with a return rationale under our control?
- How much money are we spending on marketing campaigns sending customers to products that are sold out or highly fragmented?
- Which overstocked products require increased exposure rather than a price reduction (a much more profitable solution)?
- Which first-purchase products lead to High Value/High Lifetime Profit customers?
By connecting data, merchandisers can utilize the second half of the week to strategically plan for the upcoming weeks and months. They can get out of the weeds, take a step back and use their week to actually solve problems, not simply punt or hope they go away.
To thrive and stay competitive, retailers will need to focus on their strategic initiatives that push the business further year-over-year. The challenge to win back time will play a heavy role in how retailers move into the next phase of their success. Connected data with an action-prescribing solution will empower teams to arrive at the right conclusion, optimizing their week and allowing the enterprise to take action faster, thus realizing higher profits.
Lindsay Conwell is VP Solution Engineering at DynamicAction.