Own your data. Own your success.
The first step for retailers to take is making the commitment to lean-in and take control of their data.
It is a mission-critical realization that retailers must come to make increasingly better data-enhanced business decisions. This topic was discussed in more depth in the previous blog post “Change or Fail.”
Once the commitment is made, the second step is creating a data strategy and that will be the focus of this article. Specifically, this article is to assist apparel, footwear, and accessories retailers in creating a data strategy for their company. Both the qualitative business objectives and quantitative components will be discussed to empower the technical teams to more effectively support the retail organization’s planning, buying, allocations, sales and operations, marketing and the executive team.
The data strategy document is intended to create clarity and alignment on the path towards the creation and use of a data vault. The thoughts included here are intended as a starting point for retailers to use internal teams or be better prepared when engaging a third-party vendor.
Why a Data Strategy.
- Exactly what data is available? Specifically, questions arise such as; How much historical data exists? What is the level of resolution of your product data, e.g. category, sub-category, vendor, or down to product attribute? Do we have this data on our inventory, stores, product, and customers?
- What is the quality of the data? Many retailers believe that their data is simply too “unclean” and in too many places to be useful. Typically, this concern is blown out-of-proportion and while it should be stated, it should not prevent the retailer from starting or continuing to move forward.
- What data standards if any exist? Much like data quality, it is typical for there to be few if any data standards in place. If so, this should simply be stated and a plan developed at the appropriate time to enhance the data when required.
- Roles and responsibilities? These should be well defined, understood and communicated to stakeholders.
After the introduction and executive summary, the first section of a data strategy should be focused on the goals of the business and provide the reasoning behind what the retailer wants to achieve by making the investment in their data. These can be both qualitative and quantitative. The second section focuses on the nuts and bolts of the data and team structure and is therefore mostly quantitative in nature.
Data Strategy Section One — Business Goals
This is a great opportunity for the management team to take stock and identify the top issues confronting the business. Are turns to low? Is margin eroding? Are stock-outs or overstocks too common? Is planning using spreadsheets? Is the number of email list unsubscribes increasing? What is the top recurring issue causing the management team to react to each week?
Once these questions are listed and prioritized, it makes answering the following key questions such as why the retailer is making the investment in predictive analytics, what are the top three goals and which metrics will be used . Click here for our data strategy document for more details and jump-start your plan.
Data Strategy Section Two — Data and Owning It!
In this section of the data strategy section, retailers should perform a high-level audit of their current data sets and assign ownership. Other issues such as security, adherence to privacy legislation, system integrations, migration, backup plans can also be considered but are outside of the scope of this article.
Retailers in the AFA market should review the following three areas when it comes to their data. First, what data sets are readily available? Second, what is the quality of the data? What steps will be required to obtain the desired performance of the data in terms of personnel and systems to ensure that the data quality improves over time, is readily available to business teams, and is backed up regularly and who is responsible for ongoing data management and hygiene.
The most important data to consider when starting is the retailer’s own data which includes the company’s product data, store data, inventory data, and customer data. Data sets to be considered later include customer support interactions and returns. External data such as social media and weather by store location.
Click here for our data strategy document for more details and jump-start your plan.
Benefits of Actualizing Data
There are numerous benefits for AFA retailers to visualize and actualize their data that go far beyond not being left behind by competition that is taking advantage of their data. These include productivity savings for all teams. Many AFA retailer teams spend hours developing and running reports leaving little time or desire left to review and act on the results. Data-driven companies that have unlocked their data and can visualize the data and to realize incredible savings in time and energy so business teams make better decisions faster.
Additional benefits include increased revenue growth, higher turns, fewer stock-outs and overstocks, increased conversion rates, increased customer lifetime value and more responsive support to front-line store staff. Data empowered retailers generally report feeling much more in control — becoming more proactive and less reactive. Finally, data helps teams come together as they work from a shared “source-of-truth” to make less gut-feel decisions that can be second-guessed to data-driven actions that can be rationally discussed and evaluated.
Get started. Create a data strategy document and take the first steps to make your data work for your business. While this may sound like a daunting project, it is approachable. We’ve created a data strategy document to get you started. The document can be used as a starting point for internal discussions and with third-party vendors such as FIND.
Retailers can go it alone to fully develop their strategy & hire data science and software developers to analyze and visualize their data. However, this is becoming a less attractive option as the cost and availability of hiring skilled technical talent is becoming an increasingly difficult challenge and the cost and power of third-party solutions is ever more approachable.
Third parties also that specialize in cleaning, visualizing and actualizing data will accelerate an apparel retailer’s timeline to ensure another season does not pass without the appropriate steps being taken to capture and employ data to the retailer’s advantage.
At FIND, we offer FIND Plan and FIND Periscope. FIND Periscope is an excellent place to start your predictive planning journey. Periscope provides retailers a deep dive into their data, enabling them to understand exactly what use cases their data can support, where there are improvements to be made and receive guidance on how FIND predictive planning can increase your revenues, improve your margins and reduce stock-outs. Whether taking the journey with your own team, a third party vendor, or FIND, it is critical that retailers get started to measure just how AI-ready your data is.