Master Data Management
Retailers today are facing serious competitive pressures. A greater variety of retail channels, an abundance of product options and the emergence of mass customisation have led consumers to become more demanding, price sensitive and disloyal. There are massive shifts in consumer demographics, expectations and preferences. And the global economic uncertainty continues to deteriorate consumer confidence, forcing retailers to offer discounts on an unprecedented scale.
In a business where operational efficiency is paramount, retail executive teams must find ways to meet these challenges while also taking advantage of opportunities for growth through market expansion, format innovation, improved assortment localisation, private label items and more.
Surviving and thriving in this environment calls for clear and continual visibility into demand, which requires fast access to accurate product data—master data that often resides in multiple systems and in many different formats, both within the enterprise and in external systems.
Data is a strategic issue
The way retailers handle data is becoming a strategic issue. Within larger retailers methods and approaches learnt via ecommerce are now feeding back and influencing the direction of the wider business. For these reasons, choosing the right technology is now a key decision. Get this decision wrong and it could be an expensive mistake.
It’s all too easy to think of the data a company holds as somehow abstract. Think of data as information which your customers will use to decide whether to buy from you or go elsewhere, and its importance comes more sharply into focus.
MDM as a single source of truth
A master data management platform (MDM) allows retailers to develop and maintain a single, consistent view of product data across their retail business. The result: improved up-sell and cross-sell conversions, faster introduction of new products and increased customer loyalty. Retailers gain access to fast, consistent and highly accurate operational information. This results in proactive strategy decisions based on up-to-date business insights rather than historical reports.
There’s an explosion in the volume of product data and managing this data is increasingly complex. In fact, ‘managing’ or ‘coping’ is no longer enough, we need to master the data and turn it into a selling tool.
The product data challenge starts with the importance of product information. Many online customers use mobile devices in-store, with uses ranging from product information, price comparison, store location and vouchers.
More than ever before, the ability to react and execute faster — to ensure that the right product is pitched correctly in the right channel and at the right time — is absolutely critical.
Retailers use MDM to:
• interact consistently with the customer regardless of channel
• improve agility
• improve efficiency with partners
• implement active selling
• speed up the setup of new items both online and in store
• rapidly grow their business through online and mobile commerce
Interact consistently with customers across channels
MDM helps retailers instigate a consistent relationship with the customer regardless of whether the customer is in-store, shopping online, or via a mobile device. MDM helps retailers weave together these customer interactions into a consistent picture, for example saving a shopping cart created on one device to be visible and active on another device. These give the customer a more seamless experience more likely to result in a sale than the usual more fragmented experience which frustrates many online shoppers.
Master data management solutions help retailers develop the operational prowess to increase profitability and reduce risk in a many-channel world. MDM tools and services are designed specifically for executive teams. As business success tools, they’re designed to deliver up to date, consistent and highly accurate operational information about products, suppliers and customers. That way, retailers can more rapidly comprehend and act on business insights rather than rely on historical reports.
Retailers can optimise inventory levels by having a single, consistent view of product information across the enterprise and supply chain — without forcing every department, business unit and supplier to use the same system or data format.
To sell effectively to customers, retailers need robust systems to handle data and to treat data as a core asset for competitive advantage.
Improved efficiency with partners
MDM also improves efficiency by enabling retailers to more efficiently acquire product information from suppliers and by making sure that the information is delivered quickly to multiple business systems to support selling channels.
Another benefit is reduced risk by ensuring that every department, division and decision maker has fast access to accurate operational and regulatory compliance information.
Through MDM, executive teams get a single source of truth needed to take action on customer, product and supply chain information — and a way to share that information consistency across all sales channels.
The benefits can extend outside the retailer to the firm’s trading partners. With the increase in incoming product feeds from content aggregators and drop-ship vendors, extended ranges and web-only suppliers, retailers are now co-ordinating data outside their business – often from companies with different data structures and merchandising approaches.
Providing a data platform that not only holds and collates otherwise disparate data points but also provides cross-organisational workflows makes it easier for teams to work together and understand their contributions.
With the growth in products available for sale online retailers need to make critical use of searchandising, personalisation and recommendation tools to increase the relevance of products shown to customers, thereby increasing sales. These tools require top-quality data to operate at peak capability and providing data from various sources is a resource drain and prone to problems. In addition retailers need to provide complex product feeds to affiliate networks and partners, search engines, marketplaces and retargeting systems.
It follows that improving how information is presented can pay dividends. If a consumer comes to a site and finds product descriptions that are accurate, consistent and insightful, plus rich media and, for those who want to drill down further, even manuals and buying guides, s/he is far more likely to trust a retailer. In short, the consumer will be reassured and the barrier to a purchasing decision is lowered.
Improved onboarding to grow revenue
A strategy many switched on retailers are using is to increase the number of product ranges offered online, adding new categories, or expanding existing ones. How do retailers cope with that, dramatically increasing their online ranges without increasing the operational cost? Retailers can use MDM tools which allow suppliers directly to on-board product into the retailer’s infrastructure without any handholding and without the retailer losing control. This can mean on-boarding expanding to product catalogues of hundreds of thousands or even millions of products.
Using an MDM system demands that companies look in depth at how they handle information. In the worst-case scenario, an ad hoc system involving spreadsheets, buyers, merchandisers, suppliers and a great deal of duplication of effort and confusion will have developed down the years.
Quite simply, any company wanting to use MDM to its full potential has to challenge this status quo.
Mobile commerce and social media — spiralling data
The era of mobile commerce has arrived. Using MDM, retailers can both create versions of content for mobile and link products to store locations so that customers who are out and about can go pick up their item.
Moving ahead: Taking data seriously
Retailers need to provide a very complete and compelling view of the product. A retailer that takes its data seriously is far better placed to react to the way its customers shop, improving search and recommendation functions by instituting rules based on rich, granular data feeds. This attention to detail can also help with tailoring content to different kinds of customers so that, for example, a kitchen supplies website would treat a restaurant owner differently to an amateur cook browsing for a new frying pan.
According to the Baymard Institute, collating shopping cart abandonment statistics produces an aggregate average figure of 65.95 per cent. Clearly, even if companies get the right goods in front of the right people at the right time, there’s still a problem with securing the sale within the ecommerce channel.
The reasons for this are complex, but one way to improve the chances that customers complete a purchase is to ensure they have relevant information. Usability studies show that anything that jars with a customer is likely to make them think twice about parting with hard cash.
The data that retailers gather from customers themselves is becoming increasingly important. This data can be used to drive personalised recommendations. Similarly to the technology used in merchandising, personalisation software is rules-based. It follows that if it’s driven by the kind of rich, granular data feeds that an MDM system provides, it will be far more effective.
Add in the increasing richness of this data and the ever spiralling amount of social media data and it’s clear that data is simply snowballing. The increasing complexity and diversification of omni-channel retail will only make handling data effectively more important.
In an era of increasing personalisation within retail, handling data well is crucial to providing great customer service. That’s because in the future customers will expect retailers to be able to access order information, and perhaps even more personal information such as sizes provided in order to use virtual fitting rooms, without fuss and at the drop of a hat.
Faced with such a landscape, the case for putting MDM technology at the centre of retail operations is very clear.
Willem van Dijk is Managing Director, Australia and New Zealand for Stibo Systems. For more information visit www.stibosystems.com.au or call +61 3 8530 7087.