It was a difficult start to the year for many retailers. Bank Fashion, the first UK retail casualty of 2015, went into administration in early January, followed by Radio Shack, an American electronics retail chain, who filed for bankruptcy shortly after. Target, Austin Reed, Wet Seal and Country Casuals are just a handful of other retailers from around the world who failed to make a positive start to the year. And poor decision making lies at the heart of the problem.
Brands that fail to cater their situational assessments based on the platform they are using, whether it be in store or online, is the reason we are seeing many bad decisions, or worse, no decisions at all.
Decisions across systems
With retailers shifting to online platforms, decisions have become nano-decisions. They are made at a much more detailed resolution and frequency than the aggregated, relatively simple world of physical retail. Today, our digital and multichannel world is powered by a breath-taking array of technologies. Decisions have to be made across multiple software systems (often 20-30), but we are still seeing executives who think that that they have a ‘webstore’ that runs their business.
Decisions are more complex
Often resolutions are buried in black boxes, and it can be difficult for managers to see the logical structure of those decisions clearly. However, it is imperative to make sense of it all in order to have any hope of success. When retailers get this wrong it can be a costly mistake, leading them to miss opportunities, waste money and (in the end) leave customers frustrated.
To complicate processes further, we now have nano-data - the digital exhaust of all the actions and activities created by digital commerce. The data comes from a wide variety of different systems and sources, is inherently variable and volatile and demands a much higher level of resolution than physical retail.
A typical retailer will easily generate 100 million data points a week. Imagine a retailer with 500,000 customers, 20,000 products and 50,000 marketing campaigns. The data is multiplicative – every click, from every visitor, on every product, from every marketing source. One can see how quickly the data explodes.
Joining up the data
The digital exhaust provided by any web analytics system identifies hundreds of attributes for each customer, website visit, marketing impression, product and order. Many are common across systems – such as email, product ID and order ID – enabling the data from different sources to be connected.
When the data is joined up it lights up even more attributes so customer information can be linked to product data, inventory data can be linked to web analytics data and marketing data can be linked to inventory data. It all needs to come together.
Digital commerce does not respect organizational boundaries. Retailers need to find ways of attaining an integrated view of their data that cuts across traditional silos and systems. Only then will they be able to take control, make sense of what’s going on and get on the path to profitable growth.