It's critical to an apparel retailer, for example, that the right styles are ordered in the right sizes and colors, and distributed to the right channels at the right time. To achieve this, employees need to see information across channels and functions, so they can take actions in merchandising, marketing, distribution and fulfillment to satisfy customers and run the business optimally.
Compared to other industries, retailing is extraordinarily complex because of all the moving parts that need to be managed simultaneously -- each of which has a major impact on the other areas. Many retailers have to handle multiple suppliers, channels, brands, geographies, offers, stores, products in different sizes and colors and alternate points of distribution. Not only does reaching a single business goal require that all of these areas perfectly align, but if one of these areas is out of synch, the repercussions will be felt throughout the organization. A retailer might have the right selection that has been allocated appropriately across all channels, only to lose sales because the goods weren't available the day a promotional offer kicked-off.
So how can retailers achieve enterprise-wide visibility with a retail intelligence solution that allows them to react immediately to trends and changes as they occur? It's all about the data. Getting good data is the basis for making the right decisions in all areas of operations -- delivering what your consumers will want, where and when they'll want it. So what is good data and how can you get it?
Solid, reliable data has four key attributes: It has to be timely, provide a baseline, be accurate and available to the right individuals who can act upon it. So what does all this mean? Timely means today. You need to know where your business is right now and you also need a solid baseline of information to compare it to. You might have sold a certain number of SKUs in a particular store, but does it indicate growth? How does it compare with your other stores or channels? If you're selling less than you sold last year, are you seeing an increase in online buying? Should you consider adding new offers or shifting your marketing focus to online promotions? It all depends on what the data is telling you.
You also need to have confidence that your retail intelligence system is delivering accurate, relevant data. With information coming in from different areas of your business -- and different computer systems and applications -- you may have incomplete, competing or missing information. Determine which information is relevant. For example, do SKUs that haven't been touched in three years need to be in the reports you use to run your business everyday?
To gain insight into what is really happening, make sure you are able to drill down into a granular view of the data beneath the dashboards or summary reports. This will allow you to identify the root causes of an issue and determine the right course of action. For example, if a particular item is not selling, at first glance a reasonable response might be to cancel backorders and space in the catalog. But, by drilling down further into the data you might find that the direct mail drop was one week late. What might initially appear to be slow demand is really delayed demand.
Understanding the dynamics of your business through a direct path to the data should support immediate tactical execution. An effective retail intelligence system should trigger alerts for thresholds you define around key metrics for inventory, margins, demand and all critical business areas. This will help identify under-performing and over-performing areas in your business and how to make quick improvements.
Retail is all about being agile, in tune with your customers and market conditions, and being able to maneuver quickly to avoid costly mistakes and capture more opportunities. Having visibility across your organization at any moment in time is a powerful competitive advantage. It's amazing what can happen when you put this knowledge in the hands of as many people as possible. The most successful retail operations understand this. They know that access to accurate and actionable retail intelligence throughout an organization leads to smart decisions that drive overall growth and profitability.
George O'Conor is founder and Chairman and Chief Strategy Officer of Oco, Inc. He can be reached at [email protected]. More information can be found at www.oco-inc.com.