Every time a leather jacket is purchased inside a store, who notices?
More importantly, how quickly is the information shared? And last, but not least: what details about the jacket’s size, color, and store locations are given?
With today’s tools, transactions can easily be tracked. However, accessing these records isn’t always clear cut. Furthermore, the right details which can impact the bottom line sometimes aren’t available. Data silos, isolated departments, and weak or nonexistent dashboards often lead to havoc.
Those in the retail industry tend to be aware of the essential role data plays in the decision process. They know that solid data feeds the revenue machine. In a survey of 350 retailers and brand manufacturers, 76% stated that insights are critical to their performance. 1
While many are collecting data, they note that gathering the right information is difficult. Only 16% of survey respondents stated they were experts at data harnessing.2 The sheer volume of data coursing through retail systems can be overwhelming.
When looking to break down silos and integrate data, a solid starting point involves gaining an awareness. It includes observing the obstacles that are often present among retailers today. A full analysis moves on to ask questions about what should be tracked. After that, opportunities to utilize data to increase margins can be examined.
Traditionally, departments in organizations were often set up to be independent. While operating on their own brought certain benefits such as strong departmental teams, there were steep drawbacks too. The sales function might not have communicated regularly with the marketing function. The procurement section often didn’t interact with other departments, and so on with the other functions in an organization.
Typically, these departments were isolated with good reason. In the recent past, implementing systems to connect functions was far from easy. For instance, putting in an enterprise resource planning (ERP) solution required a significant upfront investment. The transition typically included frequent bumps and delays. Sometimes it took up to two years to carry out an implementation.
Thus, disconnects became part of doing business. However, a lack of integration often led to losses. If 10,000 brown leather jackets were ordered, there might be a breakdown in communication between the ordering step and the selling of the merchandise.
Perhaps the jackets’ order was placed during February 2022. A shipment of 10,000 brown leather jackets arrived six months later. As the apparel sold, information about each transaction could go largely unnoticed. If consumer preferences changed, the racks holding brown outerwear might stay stagnant. Eventually, when the retailer notices the stall, it might be too late to make any changes. The jacket price might have to be reduced—and reduced further—to ultimately sell.
If, instead of disconnected data, an integrated system were in place, jacket markdowns could be avoided. A retailer might be able to spot the slow movement of sales early on. Better yet, the ordering step could be revamped. Perhaps instead of manufacturing 10,000 brown leather jackets, a mere 1,000 are requested. In addition, 1,000 black leather jackets could be supplied. To provide selection, 1,000 red jackets might be included in the order.
Once the jackets arrive at the store, their status could be monitored. Perhaps brown leather sales are weak. Black leather transactions might be slightly better. If red jackets are flying off the rack, a notice could appear on a dashboard. Once the retailer is aware of the trend, more red jackets could be requested. This strategy takes advantage of the increased red attire sales. It also avoids having a large supply of an unwanted item—in this case, the brown gear that didn’t attract shoppers.
Putting in an integrated system doesn’t equate the ERP experience. Software solutions are readily available and less complicated to install. Moreover, an investment doesn’t have to be as overarching as an ERP solution. It’s possible to select several pieces of software that capture specific data.
Before choosing solutions to integrate departments, it’s vital to evaluate what information should be tracked. The systems available today can gather an enormous amount of data. Trying to look at everything could lead to confusion. If data about jacket sales is reported, along with thousands of other details about merchandise, it becomes nearly impossible to sift through everything. Valuable resources, including time and labor, could be drained while sorting for clues on jacket sales performance.
The following questions can be used for a conversation about data tracking:
Once the right software is in place, information can become readily available. The data that is shared will make a difference. It will be much easier to follow the movement of products. A dashboard on a screen could indicate what is selling, both online and in-store. In the case of the leather jackets, a few clicks could reveal when the last garment sold. Also on display: where it was sold, how many similar items were purchased during the last week, and how many brown, black, and red jackets remain.
While the pre-order function has been in existence for some time, its use is not always maximized. The feature can be leveraged to drive future revenue. It can also delight customers by giving them a chance to participate in the creation of goods.
When a pre-order button appears on a website, it’s essential to make it easy to find. Shoppers should also be able to determine how they can use it. If a set of binoculars is out of stock, the customer can select the pre-order option. Once the next batch of viewing devices arrives, they’ll receive their purchase.
The pre-order function can be used to provide customization. Perhaps the customer would like to choose the color of the binocular case. They might add their initials to the case as well.
This concept is often used to develop up-and-coming products. Through the pre-order function, customers provide comments on what they would like to see. The shopper might indicate that a larger set of binoculars would be helpful, or that they would like to see family packages. For instance, a set of smaller field glasses and larger frames might make an attractive gift. Customers feel valued when given the chance to participate in the creation process.
Breaking down silos and integrating data doesn’t have to be a lengthy, clunky project. Organizations that view it as an opportunity to gain access to meaningful data will be on the right track. With careful monitoring, losses can be avoided. When retailers provide customers with the items in demand, sales increase. Enabling others to pre-order sets the tone for future revenue and satisfied shoppers.