Increasingly, retailers are collecting large volumes of transaction data at the point of sale. This data makes pinpointing consumer behavior easier than ever, as retailers obtain real time data about consumer preferences, whether it is the latest fashion trend, a hot new food item, or packaged good.
With Big Data, retailers have the ability to stay on top of the competition and respond quickly to consumer demands. But point-of-sale transactions aren’t the only source of Big Data. Retail supply chains and internal processes are also generating large volumes of data. If retailers want to succeed in a competitive marketplace, they must not only collect retail data, they must also understand how to control it.
As more retail companies grow through mergers and acquisitions, expand into new territories, or launch new product lines, they must consider how data and processes work together to support the businesses’ near term and long term goals. Here we present some simple rules that retailers can follow to help them capitalize on the valuable data they have while staying in control.
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- Focus IT Spending On “High-Value” Information. While many retailers collect a lot of transactional data, only some of it provides valuable, actionable information to the business. Using a data volume management strategy is an important first step to controlling Big Data. The strategy should identify what data is important to the business, so the company can focus its IT spending and resources on improving storage and processes related to that data. With a focused approach to data management, retailers will be able to improve analytics, increase processing speeds, and gain new insights.
- Improve Value To Customers By Integrating Sales With The Supply Chain. In retail, the separation of consumer side processes from the supply chain can slow businesses. Breaking down the silos of information that exist between retail stores and the supply chain will significantly increase reaction time for retailers. Finding ways to integrate retail data and processes with the supply chain data and processes will provide a more comprehensive view into retail operations and provide a framework for future improvements. According to a recent survey of retailers running SAP systems, 63% of Supply Chain Management professionals polled said IT integration is a major priority for 2014.
- Location Matters – Align Business Value Of Data With Cost Of Storing The Data. Just as with retail locations, the location of your data is a critical consideration for your business. As part of a data volume management strategy, retailers must consider how frequently data is used and put that data in the fastest, most convenient location for users. Technology like SAP HANA can provide users with instant access to data and analytics, however that type of access comes at a price. Consider taking a hybrid approach to data storage. Put less frequently accessed data in cloud storage or a standard database, and incorporate archiving for data that is static or less frequently accessed by the business users. This strategy will enable users to have efficient access to the data, but at a greatly reduced cost.
- Streamline Near Cash Processes For Immediate Cost Savings. Often, retailers look to improving the supply chain to gain efficiencies, however, streamlining near cash processes such as accounts payable and accounts receivable can provide businesses with efficiencies too. These processes move cash through the business, so an investment in improving near cash processes also improves the bottom line. Retailers can leverage technology to automate manual processes and reduce exceptions, so they can speed up processing time, increase cash flow, and provide a better foundation for planning and forecasting. By tracking key performance metrics, the finance team can identify bottlenecks and improve near cash processes so they are lean and efficient, just like the supply chain.
- Hidden Cost Of Data Security. With new and different data being captured by retailers every day, it can be easy to overlook the need to keep that data secure, both at the point of sale and after business is complete. Retailers are increasingly holding on to sensitive consumer data, including credit card data and personal information that may have been collected as part of the sales transaction. Restricting access to sensitive data to key individuals and ensuring data is stored in a secure location and cannot be bypassed are simple ways for retailers to keep their data secure. These data security measures cost very little, however, they can be easily forgotten. Recent stories of retailers being hacked illustrate the cost of ignoring data security. In addition to the fines that can be levied against the business, retailers can face a PR nightmare that damages the company’s reputation, scares away consumers, and reduces shareholder value. Keeping data secure from the moment it is captured until it is destroyed should be a priority for all retailers.
There are many ways that retailers can optimize the way they collect, store, and process Big Data. By understanding these methods and managing data more effectively, retailers can leverage Big Data in critical and differentiating business processes and achieve both near term and long-term business goals.
As Dolphin’s Principal Business Process Management Strategist, Brian Shannon is focused on business processes and financial solutions to maximize return on investment. He has more than 15 years of SAP experience and his background includes thought leadership, knowledge management, project management, training and SAP consulting with extensive experience in the automotive and manufacturing sectors as well as oil and gas, retail and utility verticals.