While most retailers appreciate the value of data, few are fully aware of how to extract the most valuable insights. Lee Thompson from NetSuite offers some tips.
Most retailers already know that their data has immense value. However, few are fully aware of how to extract its most valuable insights, monetise it as part of the sales and marketing process and keep it safe amid frequent threats of cyberattacks. To do so, retailers need visibility into their enterprise-wide data footprints, as well as an agile software platform that can process the data in a scalable way.
Finding the mother lode
The first step towards a comprehensive retail data strategy is to identify which parts of the business generate the most valuable data. Most retailers gravitate towards social media channels and customer profiles as their go-to source of intelligence. While these are extremely useful, so too are a range of other touch-points that generate proprietary data about customer buying trends and patterns. In fact, what’s often more important is how retailers draw correlations between different sources of data, allowing them to melt down these individual nuggets into ingots of greater insight.
Retailers often overlook point-of-sale systems as one of the most useful data sources in their operations. While e-commerce data is frequently used to assess product strategies, it’s typically only one part of the picture: a digital marketing campaign may, for example, influence up to 40 percent of bricks-and-mortar purchases, as well as online sales. Retailers can only gauge the effectiveness of their sales and marketing strategies — and further improve their ROI — by tracking data from credit card terminals, cash registers and telesales as well as their online and digital channels such as websites and social media.
There are two ways retailers can go about gaining comprehensive, accurate insights from their data. The first is to track data from all customer and supplier touch-points, the second is to focus more on core “mother lodes” of data, like inventory, which reflect general trends across these touch points (such as greater overall sales). Both approaches require enterprise-wide ERP systems that can track, monitor, and filter this data in real-time.
Refining the finished product
Once retailers identify what data has value to them and implement automated platforms to extract it, their next priority is to apply it to their sales and marketing endeavours and even to their product development processes.
Retailers will be able to take data from customer profiles, point-of-sale traffic and supply chain and incorporate it into every customer-facing asset from personalised newsletters to special offers on excess inventory. This only works when using ERP platforms that integrate smoothly with marketing automation tools, allowing retailers to personalise customer communications en masse while also reducing manual “grunt work” and its associated inaccuracy. As just one example: the use of NetSuite’s ERP platform with Bronto, a fully-compatible marketing automation tool, can in cases boost email-driven revenues by up to 60 percent.
Data plays a role not only in guiding product strategies, but also assessing their effectiveness. Frequent or even automated evaluation of campaigns can help marketers quickly identify when their strategic investments are working and when they aren’t, helping them further increase ROI while minimising risks. To do this, retailers can incorporate automation rules in their ERP platforms that alert them to changing business conditions in real time, like sudden drops in inventory, surges in demand for particular products or heightened inquiries via social media. This can further inform strategies like offering a new product range or increasing the duration of a promotion to meet newly quantified customer demand.
Protecting the goldmine
The Australian Crime Commission estimates that cybercrime costs Australians at least $1 billion annually, with retailers a prime target for their highly sensitive customer data. If retailers fail to deal with these threats seriously and sensitively, they risk losing the trust of their customers and access to the very data that they increasingly depend upon for their survival. Retailers must strive to be open, honest, and transparent about not only how they use personal data, but also in alerting customers in the event that a breach or criminal attack does take place.
For almost all retailers — particularly smaller and mid-market players — it is an extremely costly and time-sensitive process to maintain up-to-date cybersecurity with in-house resources. Cloud computing, perhaps counterintuitively to some retailers, is in fact often safer than storing sensitive data in-house, since service providers have the dedicated resources and intelligence to maintain security at far higher levels than individual retailers can.
Organisational data is a goldmine that can yield vast amounts of value to retailers who know how to mine, refine, and apply it in their operations. The most successful retailers, however, won’t simply use that data to tailor sales and marketing efforts, but as a fundamental part of how they design and develop new products. With the right security measures and cloud technologies in place, retailers can use data as an incredibly powerful tool to do what they do best: engaging with customers and meeting their needs.