- Organizations struggle to connect and utilize retail data effectively, hindering their ability to become customer-centric.
- Traditional retail operates in silos, leading to operational inefficiencies and information mistrust between departments.
- Gartner emphasizes the need for a departure from traditional retail operations to create a customer-centric assortment.
- Democratizing access to customer data enables better alignment and informed decision-making across cross-functional teams.
- Investing in data sources that transcend specific departments empowers organizations to be agile and responsive, leading to improved profitability.
Data Challenge in Today’s Retail Environment
In today’s retail environment, organizations usually have a wealth of information and data at their disposal. However, connecting, democratizing, and actioning retail data into meaningful analysis can pose a big challenge, and prevent organizations from becoming truly customer centric.
Traditional retail has usually operated in silos. Buyers/merchants focus on product development and line selection, the pricing/planning/merchandising teams own margins and forecasting, the marketing teams look after advertising and promotions, and ecomm teams might spend time looking specifically at website traffic, basket sizes and conversion rates.
The result? Different operational processes, different data systems and ultimately different sources of information. This leads to operational inefficiencies, a mistrust of information shared between departments and sometimes a lot of broken telephones across the business.
According to Gartner, “shifts in consumer expectations require new approaches that think beyond the “four walls” of the retail store. This requires a departure from the traditional split in operating structure, where merchandising drives procurement of inventory and pricing while marketing manages the messaging, communication and advertising to consumers. As customers increasingly expect personalized experiences, recommendations and offers, marketing, and merchandising must work as a left and right hand to mold the retail experience”
Leveraging Customer Data: Unlocking Insights for Enhanced Merchandising
So, how can cross-functional teams become better aligned?
According to Gartner, “retailers are aware of the significant opportunity to leverage vast amounts of customer data to drive in-depth customer analytics that enhance merchandising processes. The goal is creating customer-centric assortments across every touchpoint, optimally priced and available to consumers when and where they expect to browse, transact and acquire items.”
Without that customer level data, it’s impossible for product teams to optimally assort their products for planners / pricing teams to know how to price a line to maximize margin not only on one singular product they might buy, but on the customer’s basket as a whole, and for marketing teams to identify how to pair products together from a promotional and key messaging perspective. In short, a retailer will never be able to truly create a “customer centric assortment” if access to insights and analysis aren’t cohesive across an organization.
At EDITED, we often hear that many product or site merchandising teams don’t have access to customer-related insights, such as Basket Analysis information. That customer level basket analysis information might sit only with one or two siloed departments, and get reported out on a weekly or sometimes even monthly cadence. The result? Less insight into what customers are actually pairing and buying together, and therefore less overall ability to plan for buys accurately and in alignment with what the customer actually wants to purchase.
Democratizing Data: Aligning Cross-Functional Teams
By not only using the same sources of information across the business, but by also democratizing access to that data, organizations can start to see big shifts in their results.
For one site merchandising team, the democratization of customer buying behavior data changed the trajectory of their multi-brand ecommerce business. Prior to having access to EDITED’s connected metrics, customer data and analysis were largely siloed to a separate marketing team that focused on the overall customer, with an emphasis on the brick-and-mortar customer. The ecommerce team was largely blind week to week when it came to understanding who was buying what products, and had to focus on one dimensional analysis of product purchases to make guesses. Not being able to answer basic questions about the customers shopping on their site reflected badly on the department, and was impacting the teams' results.
When this department started analyzing EDITED’s connected metrics, the team could clearly see the mix of new customers and best customers in the performance of the business. Suddenly, the team could unlock answers about a customer’s participation across all of the company’s brands, and the team was able to identify which categories acquired new customers versus which ones reactivated their profitable ones.
In addition to having a deeper read on their business, the team could take action in the following areas based on the insights they could gather:
- Make immediate site merchandising changes by boosting certain categories or products
- Create/update recommendations zones on product pages
- Add pop-ups to the cart page with product recommendations to increase AOV
- Create gifting guides for major holidays/events that aligned with what the customer wanted to purchase together around these periods
Enhancing Decision-Making With External Market Insights
Having visibility into connected metrics across your business is just one piece of the puzzle. Teams can supercharge their insights and decision-making abilities by bringing competitor market insights into their analyses.
In the case study above, the same customer was also able to monitor the promotions their competitors were running, the types of product bundles on offer and the overall storytelling across the brand. What’s more, cross-functional teams can still gain from the shared insights. Product-led teams can ensure their assortments match up to what the customer wants to buy during specific key holidays/events and marketing can ensure that their messaging, tone and promotions align with both the cultural zeitgeist and the competition. Planning teams can see what and when other products competitors are launching, and whether the timings of those launches align with any major retail milestones.
Investing in Data Sources for Agile and Profitable Retail Operations
By making the investment in data sources that can transcend one specific job function or department, your entire organization can become more agile and better equipped to act quickly on new and evolving information that can have a big impact on your revenue.
EDITED’s merchandising experience platform can act as a unifying source for organizations struggling with fractured business reporting chains and siloed sources of product, pricing and customer data.
Our platform is specifically designed to support organizations in democratizing insights to employees across departments while aiding them in diagnosing the “why” of their business unit, connecting fast relevant insights, and predicting what the outcomes of taking certain actions might be, so teams can actually act on recommendations quickly and make decisions that will lead to profit.