Retailers are wasting significant dollars investing in data quality control systems. The good news is: data verification can be optimized to cost less or even zero. It is extremely important for nearly half businesses which cite cost savings as the second most important metric when evaluating the success of a technology investment, states a recent industry study.
What is going on in the market today? It’s no secret that e-commerce businesses collect data regarding competitive prices, stock, promotional campaigns, and product characteristics to come up with the best positioning for their products. The quality of such data is the question of the utmost importance, since the data becomes the basis for pricing decisions. Every misstep in this area costs big time as the price of a product is the first thing customers care about. But what does “high-quality” data mean?
In many cases, retail companies build an internal quality control system to get a verified dataset. This happens regardless of whether they already have an in-house pricing engine and/or partner with an external data provider. Such a system requires heavy investment as well as the involvement of at least two departments: IT and pricing management teams. The approach multiplies the time of data analysis by hours and makes some of the data outdated and ineligible for further use. It also means that the managers are swamped with repetitive tasks which can be automated instead of focusing on higher value work. What is more, this puts additional pressure on IT departments that are usually buried under dozens of other technical tasks and their own KPIs. Therefore, IT teams can rarely make timely adjustments to the system or update it according to new requirements and needs.
Presently, retailers are increasingly realizing that they can engage external teams in many more business areas than ever before. While delivering a speech at Shoptalk in early March, Dick’s Sporting Goods’ VP and Head of Data Science, Analytics and CRM, Vimal Kohli, stated that there is a core competitive edge which is worth giving the best shots and involving an in-house team. Everything else is for outsourcing.
Outsourcing can be a good option when it comes to data collection. Third-party companies have been delivering data for years. However, merely the fact of collecting data is not enough. Retailers require reliable, timely and accurate data to be able to make the right pricing decisions. Luckily for the market, technology is evolving along with the needs of the industry. The first step of cooperation with a data provider is to indicate key SKUs and main competitors and submit this data to the provider. Then the process of data scraping and crawling kicks off, followed by manual and automated data matching with machine learning verification. The end result is available to retail teams via API or a dashboard. The sophisticated data crawlers of today ensure a 98% accuracy, while the data can be updated up to 12 times per day. Some solutions even allow verifying the delivered data manually via the dashboard.
Such an approach not only helps retailers make better pricing decisions based on a verified dataset, but also saves money. "We have saved 70% from the IT budget, or the capacity of three full-time IT professionals, for the data scraping and validation with Competera’s price scraping software which helps us get reliable, timely and accurate competitive data," says a representative of the Eastern European online retailer Ulmart.
Another benefit of such solutions is huge time savings and better financial performance. As retail managers no longer have to spend almost half of their time verifying the correctness of market data, they can concentrate on strategic tasks and craft customer-centric pricing strategies. For example, within the first two months of cooperating with the provider, Northern European omnichannel retailer RDE saved 80% of the capacity and time of product managers and grew its sales by 60% across two European markets.
Commonly retail teams are overwhelmed with the vast amounts of market data. Luckily, today's pricing software allows retail businesses to manage it with just one click. It is available right now.
-Eugene Sazonov,head of Competitive Data Product at Competera. IT professional with more than 17 years of relevant experience in building IT systems for retail enterprises and HoReCa. Focus: the implementation of complex IT solutions (CRM, ERP, etc.) in the retailer’s business operations.