The Importance of Data in Retail: Tips for Making it Work for You
In today’s world, retailers are presented with an abundance of data that can be truly overwhelming. From customer visits to purchases, every action leaves a trace. But how can retailers utilize this data to make smarter inventory planning decisions, develop effective marketing strategies, and improve logistics?
A recent survey of 10,000 business leaders conducted by Salesforce revealed that 30% were overwhelmed by the amount of data while 33% lacked the ability to derive insights from it. The situation can be particularly daunting for brands just starting to use data.
To help retailers get started on making the most of their data, we’ve put together some basic steps they can take to get started:
1. Start From the Result You Want, Not the Data You Have
One common mistake that many retailers make is that they look at all of their data and try to puzzle out what insights it contains. This approach is actually backward. Instead, businesses should take a “reverse engineering” approach: determine the result you are trying to achieve and find out what data you need to achieve it.
For example, if you want to increase sales, you should ask, “What kind of data do I need to understand my customers better so that I can improve my product offerings and marketing strategies?”
2. Focus on Data Quality, Not Quantity
It’s a common problem to encounter bad or incomplete data that provides false insights that point you in the wrong direction. Retailers often focus on what’s easy to measure, which isn’t necessarily what’s most valuable. Thus, it is important to make sure that the data you are collecting is accurate, complete, and relevant.
3. Break Data Out of Silos
If the marketing department has data that is valuable to the merchandising team but does not make it available, it is not of much use. Consequently, it is necessary to have a centralized data source in the cloud rather than storing information in individual spreadsheets saved locally on employees’ computers.
It is also imperative that data from different sources be organized and labeled in a similar way. This will help ensure that the data can be easily put together, enabling you to take a more holistic approach to your business.
4. Find Talent – or Train it
Retail may struggle to compete with industries such as technology to attract talent with the skills to process and apply data. Companies may want to consider hiring smart software engineers. There are other places retailers can find talent, depending on whether they need to hire someone with a background in technology.
Companies can also train existing staff. There is a lot of excellent data analytics training available, and retailers do not necessarily have to hire from other industries to bring in the necessary talent.
5. Make Clear Data is There to Help, Not Replace
Finally, retailers may face cultural barriers to integrating data. Employees may think data is important but don’t quite know why. Others may see it as a threat.
However, businesses should make it clear that the point of using data is not to replace human insight but to complement it. Data should not be seen as an infallible solution, but a tool to help retailers make more informed decisions.
In conclusion, data is invaluable for making smarter decisions about inventory planning, pricing strategies, marketing, logistics, and more. By following our tips, retailers can make better use of data and gain a competitive advantage in the marketplace.
