Inventory and sales are the heart and lungs of any retailer’s internal operational fitness; but without visibility their health is unknown.
What is needed is ongoing fitness check for retail. This can be done using data harvested from everyday operations and using it to shine a light internally to drive more value.
Surprisingly, only 1% of data gathered from business operations is currently being analyzed. According to a study from the International Data Corporation (IDC, “almost a quarter of data currently held could yield useful insights if properly tagged and analysed, but this potential is still a long way from being achieved.”
The industries that have already discovered the value of data arising from their operations are using it both as a new revenue stream and also to drive greater internal efficiency. For example, connected car manufacturers are gathering weather and road-related condition data which they can sell to weather agencies. The agencies can translate the data and use it to support or change their forecasts and travel advisories.
Uses of data in retail are rare so far but, with increasing digitalization, they will begin to capitalize on their data to improve internal operational intelligence. Rather than simply finding data to sell, there is also value in analyzing and using the data inside the business to make more informed decisions and to provide actionable insight. I believe, in the short term at least, that this presents a massive opportunity for retailers.
If a product proves popular, for example, they can feed that insight data through to warehouses for action. The warehouses can then move the product to the front of the building for faster picking. If a product is discounted too heavily and inventory is running low, an alert can go out to merchandisers telling them how many items are left in stock, suggesting that discounts may need to be adjusted.
The challenges within retail begin with recognizing there is a problem, informing the right people about the problem in time, and taking corrective action. This is a repeated operational issue that can so easily be automated. Retail technology is synonymous with complex technology ecosystems which have been built up over many years.
The constraints of this structure lead to issues around visibility, consistency and communication. In turn this can lead to errors and inefficiencies across the business – eroding margin – as well as delays implementing new technological initiatives.
Once all of a retailer’s systems are connected – from warehouse management to point of service – and real-time connectivity is implemented, advanced real-time analytics can do the rest. Then your data can truly shine a light on your internal fitness, giving you a chance to head off any health problems before they happen.