By Katie Joll
Efficient management of data resources can make a huge difference for the retail sector.
During the peak of the Covid-19 pandemic, many retailers were caught short of inventory when customers started stockpiling household necessities. Other retailers were better able to anticipate customer needs and either order in additional stock or impose purchase limits on popular items.
What is the difference between those that were able to be proactive and those that weren’t? It comes down to the power of high quality data and accurate analytics fueling decision-making.
The retail landscape evolves rapidly, yet surveys suggest the retail sector lags behind when it comes to effective use of data. With multiple channels and sources of data, a lack of cohesive, accurate data insights is common.
Master Data Management for Retail
Master Data Management (MDM) is an information management discipline that pulls together data from disparate channels and sources to create a “single source of truth.” Importantly, it categorizes master data so that data is treated consistently across the organization and users get a complete picture of the organization’s most important data points, including customers, products, suppliers, and more.
MDM represents a golden opportunity for retailers to get ahead of the game, anticipating trends, improving the customer experience, and getting a jump on competitors. It’s a way for you to more easily build a complete picture of what’s happening in your business, leading to more effective decision-making.
Data Challenges for the Retail Sector
As we alluded to in the opening section, one common data challenge for the retail sector is anticipating trends in sales and customer behaviors so that you’re able to respond quickly. For most retailers, no single system gives them a view across all lines or departments within the business. Siloed data makes it difficult to connect the dots and take timely action.
This can lead to issues such as inventory shortages, or even staffing shortages if the retailer is unaware of growing needs in certain areas. For example, consider the massive demand many traditional brick-and-mortar stores faced for online ordering during Covid, or for curb pickup. It’s easy to see how staffing could become out of balance if trends aren’t spotted quickly.
The impacts of poor data quality tend to reverberate across all retail departments. From issues with miscategorizing products, to shipping and delivery errors, to time wasted on trying to remediate data, the impacts can touch everyone in your business.
Perhaps most significantly, poor data management can lead to poor customer experiences. For example, many retailers with storefronts are still completely disconnected from online ordering. Customers used to online ordering get frustrated when they can’t order (or get help with an online order) from the business’ local storefront.
Ninety-four percent of customers express dissatisfaction with disjointed experiences in retail, and many of those will go to a competitor instead the next time they want to make a purchase. In an environment where retail customers are more angry than ever, it is critical that retailers use every tool at their disposal, including their data assets, to improve customer outcomes.
The Role of Master Data Management for Retail Businesses
Master Data Management (MDM) centralizes data from different channels and systems so that you get a complete picture across the business. Some key facets include:
- Data quality – MDM puts controls and processes in place that ensure that data is trustworthy.
- Data integration – MDM pulls together data from the different sources or channels that retailers use.
- Data governance – MDM works alongside a robust data governance program, ensuring that the business complies with rules and regulations, and that the data gleaned is useful for the business.
The bottom line is that MDM can be a solution for all data management woes that retailers face due to siloed data. Better management of data means reduced errors, improved data quality, and improved usability of that data.
How MDM Enhances the Customer Experience
Retail customers are demanding great experiences, including seamlessness between channels and departments. They don’t want to repeat themselves, and they expect the same high level of service, no matter which channel they choose.
For example, imagine a customer making a purchase in-store, then calling the customer service line for support. Under a system of data silos, the customer probably has to start from scratch when they call customer service, providing all details of themselves and their purchase.
Another relatively common scenario is where a customer orders online, but wants to return or exchange in-store. Retailers telling the customer they must go back through the channel they originally used is frustrating and time-wasting.
With MDM in place, customer service teams online and in-store have a complete view of the customer and don’t need to waste their time gathering information that the customer has already provided. The “single source of truth” allows retail staff to quickly get up-to-speed on the customer, including any communications that have been exchanged. No more repeating themselves and no more frustration over being bumped to a different channel or department. Satisfied customers become repeat customers.
The Impact of MDM on Supply Chain and Inventory Management
MDM is also beneficial for supply chain and inventory management. From the inventory perspective, retailers get a clear view across all channels, with the ability to spot issues or trends. This allows for proactive decisions and a better ability to manage inventory efficiently.
The same can be said from a supply chain perspective. Visibility across channels means that you can get ahead with your suppliers and place orders at the right time. Stock-outs cost retailers billions of dollars every year. The US retail food industry alone is estimated to lose $15 billion to $20 billion per year due to lost sales. A clearer view of your data gives you the opportunity to stay ahead of supply chain trends and avoid costly mistakes.
Benefits of Implementing Product Information Management (PIM)
Where MDM centralizes all data for the retailer, Product Information Management (PIM) centralizes just product data. Why would you set up PIM? It’s laser-focused on product marketing and therefore essential for retail marketers.
PIM helps to centralize product catalog management and generation, while helping to improve consistency with how different departments represent products. It tends to result in fewer product errors and less time spent putting marketing materials together.
While MDM manages all forms of data, PIM tends to have better tools to push product information to POS systems and marketing applications.
Best Practices for MDM in the Retail Sector
Some best practice for MDM in retail include:
- Treat MDM as a business decision, not an IT problem. MDM should solve key problems for retailers, such as creating a unified view that enables omni-channel sales and marketing.
- Implement data governance practices alongside your MDM program. Your data governance framework should include workflows and safeguards to check for data accuracy and redundancies. It should also help ensure compliance with rules and regulations.
- Get the right tools in place. You’ll need Master Data Management software that is built for the needs of the retail sector.
These retailers successfully implemented MDM:
- Red Wing Shoes – An MDM program helped Red Wing Shoes implement a centralized data hub, giving divisions a 360-degree view, and improving the customer experience.
- Shake Shack – Needing a clear view across all of their locations, Shake Shack implemented Semarchy xDM. Centralized data helped them gain a better view across their locations and assets, driving growth.
How MDM Drives Retail into the Future
Retail is a fast-paced environment that requires quick analysis and action to remain competitive. MDM offers retailers the potential to drive innovation and growth through proactive decision-making based on up-to-the-minute data.
Importantly, MDM helps retailers to deliver the great experiences customers expect through a trustworthy, unified view of data. Omni-channel is here to stay for retail, and a single source of truth promotes better, more efficient service.
Ready to see ROI through Master Data Management for your retail business? Get started by contacting Semarchy here.