The retail sector has arguably been one of the most heavily affected by the global shift toward digital everything.
The rise of eCommerce means customers are no longer visiting physical stores the way they did.
They now have a literal world of shopping options at their fingertips thanks to the Internet.
The traditional retail model is dying and it has become imperative to develop a digital presence and integrate the customer experience across channels.
The entire focus of retail has shifted, and data is the crux of it all.
Digital is the future of retail
The effects of a digital world on the retail sector are clearly evident. In South Africa some of the most recent events include the announcement by Massmart that they will be closing down 34 Dion Wired stores, and the closure of a flagship Edcon Group store in Rosebank, Johannesburg.
The fact that people are no longer shopping in physical stores the way they did is one of the factors impacting these businesses.
In an attempt to remain relevant, local retailers are developing their online presence and offering greater choice of delivery options.
Shoprite Checkers is the latest chain to embrace this trend, announcing that it will be offering an eDelivery service.
The fact is that the world has changed. Amazon, a purely online organisation, has become the biggest retailer in the world.
From sophisticated predictive analytics that suggests complimentary products, to extreme efficiency with regard to stock management and delivery times, Amazon sets the bar for the types of experiences customers are beginning to demand. Data lies firmly at the heart of their success.
Not just about data analysis
True success goes beyond simply analysing data to improve the customer experience.
When the only way for your customers to communicate with you is digital, data becomes the single most important asset to your business.
If you are not effectively exploiting it, you are not communicating with your customers and you risk losing them to the competition.
Given the importance of analysing and exploiting data, it stands to reason that you need to ensure the data is correct and that it can be trusted.
Data lineage must become a focus. Retailers need to know where their data is coming from, how it flows through the organisation, how it may have been changed or manipulated, and whether or not insights can be trusted.
Data quality is equally important and works in tandem with data lineage, particularly in the online retail space.
Whereas the customer should see a single online view of a retailer with all products easily accessible, the back end of these systems are often complex and draw inconsistent data from multiple sources.
Assuring the quality of this data is critical. This includes product descriptions, pricing information and so on.
The accuracy of product information is critical since the description is the only information a customer has about the product, and this needs to be accurate.
In addition, while pricing errors have always been part of retail (for example when the price on the shelf does not reflect the price when scanned at the till), in an online world with a much larger customer reach, exposing these errors could be catastrophic.
Dealing with added complexity
From a logistics perspective eCommerce also adds complexity, as it is even more critical to ensure that stock levels are effectively managed. It creates a negative experience when a customer order cannot be fulfilled due to stock levels at individual stores, as the customer sees the online retailer as a single entity. The customer experience needs to be seamless, which requires that data integration, data lineage and data quality are similarly seamless.
Adding the Internet of Things (IoT) into the matter further complicates matters.
While it can potentially be used to further the seamless experience between interaction channels, as well as for personalised promotions and greater understanding of customer behaviour, the data volumes created are unprecedented.
Gaining insight from IoT data requires streaming analytics in real time, making it even more important to ensure data quality and lineage are addressed.
Laying the foundation for success
The retail market is shifting, across the globe and in South Africa. Physical stores are closing, online purchases are increasing, and the way consumers behave in the retail space has changed.
Comparing prices is easier than ever and consumers have more choice than ever, which means buying patterns and expectations are different.
Success in retail needs to be built on a foundation of sound data quality and trusted data lineage.