Data is an indispensable resource for retailers. Today, most retail businesses understand that they must capitalize on digital data, but fewer know how to make the most of it. If these companies hope to reach their full potential, they must improve their data management.
Data management is often a struggling point for businesses. In a 2017 study, only 3% of companies’ data met basic quality standards, and 47% of newly created records contained at least one critical error. Retailers are rushing to take advantage of data, but poor management is holding back their results.
Improved data management can help retailers see better returns from these operations. Here are seven opportunities for these businesses to benefit from better data management.
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1. Increasing Marketing Personalization
Personalized marketing is one of the most common uses of data in retail. Retailers could significantly improve these efforts by putting more emphasis on the management side of data. For example, enriching their first-party information with data from third-party sources can help target consumers on a more specific level.
Data enrichment can reveal more about the users retailers are trying to target with personalized marketing. They can then reach out to them through multiple channels, emphasizing those they use the most. This will make these efforts more effective, leading to higher conversion rates.
2. Preventing Mistargeting
Similarly, better data management can improve personalized marketing by minimizing errors. Mistargeting is a shockingly common issue, with 96% of surveyed consumers receiving mistargeted information or promotions. Retailers can avoid these mistakes by using more thorough data cleansing and enrichment.
Before using data to customize marketing campaigns, retailers should check it against other sources to verify its accuracy. Removing questionable or unverifiable information will prevent mismarketing, create more relevant messages, and keep consumers engaged.
3. Minimizing Supply Chain Costs
Another area of untapped potential for data in retail is supply chain management. Just as retailers must cleanse and verify consumer data in marketing, they must ensure supply chain data is accurate before acting on it. Better accuracy and organization in these data sets can lead to significant savings.
For example, fuel is often one of the highest fleet expenses, and fuel savings rely on many factors. Poor or misleading data about regional fuel costs, engine efficiency, or route travel time can lead to higher fuel consumption. Spending more time and effort ensuring this data is accurate will help minimize these expenses.
4. Improving the Accuracy of e-Commerce Listings
Better data management can also improve the functionality of retailers’ e-commerce sites. Poor data management can lead to errors like incomplete information on product listings or inaccurate inventory figures. These errors can then impact shoppers, making them less likely to return after a negative site experience.
Before listing new items on their online store, retailers should look over the data to ensure it’s complete. Similarly, they should clean and organize inventory data to ensure it updates in a timely manner, reflecting actual stock numbers. Even small changes like this can have a considerable impact.
5. Avoiding Stock Shortages
Keeping accurate inventory records is essential for more than just maintaining functional e-commerce sites, too. Retailers who improve their inventory data management can prevent shortages by gaining a better understanding of their needs.
Data cleansing and organization will provide more transparency over retailers’ supply of various items. Retailers can then enrich these records with sales data to predict what customers want before these trends shift. They can then adjust inventory levels accordingly to meet changing seasonal demand, minimizing waste.
6. Appealing to Socially- and Eco-Conscious Consumers
Better data management improves visibility across retailers’ processes by compiling and structuring otherwise vast, unnavigable data sets. When retailers improve their internal transparency, they can then become more transparent with consumers. This will help appeal to eco-conscious or socially-minded customers.
Data management makes it easier to track where parts and products come from or how much waste a company generates, for example. Retailers can then communicate this information to consumers to demonstrate their social or environmental governance. This transparency will build trust and can improve sales.
7. Complying With Data Privacy Regulations
As retailers collect more data, data privacy regulations become a more relevant concern. At least 21 states have proposed privacy legislation that retailers may have to comply with, requiring more insight into their data operations. This compliance will be far easier with better data management.
Deduplicating, cleansing, and organizing data will make it easier to provide any necessary documentation to authorities. Similarly, it can offer more insight into retailers’ data operations, showing whether and how they need to adjust to remain compliant. As these regulations become more common and strict, this will become a crucial consideration.
Better Data Management Is Key to Retail Success
Data can be a retailer’s most valuable resource if they can use it properly. Better data management will unlock data’s full potential, improving retail operations across multiple fronts.
These seven areas aren’t the only opportunities retailers have to benefit from better data management, but they are among the most impactful. By addressing data management in these areas, retailers can experience considerable improvements.