Retailers Lack of Data Strategy Hindering Marketing Initiatives
Today's retail initiatives all seem to revolve around data. When we think about marketing automation, digital retailing and loyalty programs, they all have data at their core. Companies are looking to better understand their consumers so they can drive purchases and increase lifetime value.
In fact, according to a recent Experian Data Quality study, nearly 100 percent of retailers surveyed feel driven to turn data into insight. In addition, all retail respondents think some form of data is essential to marketing success.
With data being so crucial for business, many retailers are trying to figure out how they can better harness this valuable resource. It all comes down to creating a centralized, accurate and complete view of each customer that's easily accessible. Sounds easy, right? Well, it's actually extremely challenging given today's business environment.
This complete view of each customer doesn't exist for the majority of retailers. In fact, most are plagued by poorly managed customer data. Most retailers believe their data is inaccurate in some way. Case in point: on average, over a quarter of their databases are thought to be wrong. This is so prevalent that it's even affecting retailers’ bottom lines in terms of wasted resources, lost productivity, and wasted marketing and communications spend.
This high level of inaccurate data isn't for lack of trying. Ninety-one percent of retailers have some sort of data quality solution in place today. And looking ahead to the next 12 months, 89 percent of retailers plan to make some sort of data quality solution a priority for their business.
The issue occurs in the strategy. Most retailers approach data quality issues in an unsophisticated manner, dividing information among disparate systems and departments based on their current organizational structure. Data in this environment is never consolidated; it's maintained by a host of different data rules and competing software solutions.
The level of investment isn't necessarily the problem, it's where the investment is being made. Departmental or siloed approaches to data quality won't work in an environment where information needs to be analyzed quickly and will be used to inform strategic endeavors. A centralized and consistent approach is needed to fulfil the desires of data nirvana.
Many larger organizations are starting to realize this. The title of chief data officer (CDO) is appearing more and more as organizations look to move away from a technical approach to data quality and focus more on the needs of the business user. In fact, of those who do manage their data quality centrally, management most often resides with this relatively new title.
While a retailer doesn't need to go out and hire a CDO to be successful with its data, central management is really key. Need convincing? Companies that have enjoyed significant increase in profits in the last year are more likely to manage their data quality strategy in a centralized way, with ownership resting with a single director.
So often, companies are quick to invest in a piece of technology that will solve every problem they have. While the technology is still certainly needed and essential to managing large quantities of data, the people element and organizational structure are often overlooked.
As retailers look to gain more insight from their data, they need to be sure it's accurate and accessible. For that to be realized, the right mix of technology, process and people is needed to achieve success.
Thomas Schutz is senior vice president, general manager, at Experian Data Quality, a provider of contact data management solutions.