MDM can help unify retailing by providing a single source of truth for data across channels, systems, and departments. Learn how to create high-impact MDM strategy.
Adding new sales channels and diverse customer touchpoints for a 360-degree shopping experience is a growing priority for retailers. But it is no less than shooting in the dark if all these channels and systems act as disparate units. Retail must be unified with data at the center to avoid scenarios like conflicts in promotion, opacity in inventory handling, supply chain mix-ups, pricing errors, and even some misses with regulatory standards.
Data can enable a unified retail experience with insights for proactive decision-making across pricing, demand forecasting, upselling, and any other retail strategy when managed accurately. That is why creating a “single source of truth” with Master data management (MDM) helps unify data across the value chain, enabling improved business operations and outcomes.
Importance of Unified Retailing
Fragmented retail systems restrict customers from seamlessly shopping across sales channels due to a lack of real-time data integration capabilities. Unified retailing combines disparate technology systems to simplify retail processes and enhance customer engagement, culminating in a consistent brand image.
Here Are Some Key Benefits of Unified Retailing:
- Improved Operational Efficiency: By streamlining processes and systems, unified retailing reduces operational complexities associated with managing various touchpoints. Retailers can optimize resource allocation and streamline fulfillment processes for connected commerce.
- Boost Sales: Retailers can implement hybrid features such as buy online, pick up in-store (BOPIS), and ship-from-store, improving inventory utilization and fulfilling customer orders more quickly and conveniently. Moreover, unified retailing systems are scalable, allowing retailers to expand their operations, add new sales channels, and enter new markets rapidly.
- Improved Decision-Making: Unified retailing systems integrate data from various touchpoints, providing retailers with a comprehensive view of customer behavior and preferences. This data-driven approach allows retailers to make informed decisions, personalize marketing efforts, and tailor product offerings based on customer insights.
- Enhanced Personalized Experience: Whether the customers are beginning their shopping journey online, in-store, or through a mobile app, unified retailing ensures customers continue it on another touchpoint without disruption. This connected journey leads to higher satisfaction and loyalty. Customers can even accrue loyalty points, receive personalized offers, and redeem rewards across all touchpoints.
Where To Start?
Upon comprehending the importance of MDM, businesses can proceed to the next phase of the implementation process: having an MDM roadmap. Such a plan outlines how a business can implement and manage MDM over time. The first step in developing an MDM roadmap is to assess the current data landscape by:
1. Understanding Your Current State:
- Clearly define the scope of the assessment and consider the specific data domains most critical to retail operations.
- Identify and document all data sources within the retail organization, including databases, point-of-sale (POS) systems, e-commerce platforms, inventory management systems, customer relationship management (CRM) systems, and third-party data providers.
2. Knowing Your Data Quality Challenges for Unified Retailing:
- Evaluate retail data quality by accessing data accuracy, completeness, consistency, timeliness, and relevance to identify areas with data quality concerns.
- Analyze how data is integrated across various systems in the retail environment by examining data flows, integration points, and other challenges related to data harmonization.
3. Aligning Your Retail Business Goals for MDM:
- Assess the organization's data culture and the level of data awareness among employees. Determine whether there is a culture of data-driven decision-making.
- Evaluate the technology stack and tools used for data management, data warehousing, and analytics and determine whether they align with the MDM goals.
How To Develop Your Roadmap?
Having completed the aforementioned assessment, an enterprise will have a comprehensive understanding of the current state of its retail data landscape. This knowledge is foundational to developing a strategic MDM roadmap outlining the necessary initiatives and steps to enhance data management and governance in the retail environment.
1. Define Your MDM Vision and Goals:
The MDM vision is a high-level statement that describes the desired future state of data management within the retail organization. Start by clearly defining the objectives and business goals for the MDM initiative. Determine the specific data challenges that must be addressed and the desired outcomes. Here are steps and considerations for defining an MDM vision and goals in a retail context:
- To align the MDM vision with the broader business objectives of the organization, consider factors like increasing sales, improving customer experience, reducing data errors, or data privacy compliance.
- Define specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with the MDM vision. For example, a reduction in data entry errors by 20% can be aimed for in the first year of implementation.
- Ensure that everyone understands the benefits of MDM and how it relates to their roles and responsibilities.
2. Identify Your Key Data Domains:
The specific data domains key for retail MDM vary depending on the organization's focus and needs. Prioritizing domains – based on their impact on business objectives – is critical to achieving MDM goals. Here are some examples:
- Product data: This domain covers product attributes, descriptions, pricing, SKU numbers, images, and specifications, which are crucial for maintaining a consistent and accurate product catalog across all sales channels.
- Customer data: Accurate and complete customer data pertaining to profiles, contact details, purchase history, and segmentation is essential for personalized marketing, customer service, and relationship management.
- Inventory data: It includes stock levels, SKU data, warehouse locations, reorder points, and real-time inventory updates that enable order fulfillment, demand planning, and preventing stockouts.
- Channel data: This pertains to the different sales and distribution channels, such as e-commerce, mobile apps, physical stores, and third-party marketplaces, ensuring consistent product listings, pricing, and customer experiences.
3. Plan for Data Governance and Stewardship:
Managing an MDM system rests with specific key roles, which vary depending on the organization's size, structure, and MDM strategy. Here are the primary stakeholders and their roles in managing an MDM system:
- Roles within the data governance team include a Chief Data Officer (CDO) and data owners. Data stewards’ responsibilities include setting data quality rules, ensuring data regulatory compliance, and resolving routine data-related issues.
- The IT department plays a crucial role in implementing and maintaining the technical aspects of the MDM system. IT administrators and data engineers are responsible for system configuration, integration, and data security. They also handle system upgrades and performance optimization.
- The vendor or service provider is responsible for system maintenance, updates, and technical support if an organization opts for a third-party MDM solution or service. The organization and the vendor should collaborate closely to ensure the MDM system meets business requirements.
4. Develop a Phased Implementation Plan:
It is essential to break down MDM implementation into manageable stages. A phased approach allows organizations to gradually launch MDM capabilities while managing the complexities and ensuring a successful deployment.
- Begin with assessing your retail organization’s current data landscape and prioritizing the areas that require improvement.
- Divide implementation plan into phases. How will you group your project activities into logical and sequential stages? What are the objectives, deliverables, and dependencies of each phase?
- Decide what are the tasks, resources, timeline, and budget for each phase? Who will be responsible for each task?
- Choose when there is awareness about the focus of the MDM strategy and the desired tangible outcomes.
- Decide outcomes KPIs such as data accuracy rate, increase in cross-selling revenue, and customer satisfaction scores.
- Monitor and evaluate your implementation plan. Collect feedback and lessons learned from your team and stakeholders?
Eventually, the plan can advance from pilot testing to full-scale implementation after the predefined benchmarks are achieved. It is important to note that MDM is a continuous process and demands periodic reviews to stay relevant in the evolving business and market conditions.
5. Communicate Your Roadmap to Stakeholders:
Implementing and managing MDM is a collaborative effort involving technical and business stakeholders. Thus, it is essential to have the right people with the necessary expertise and tools/technologies to successfully implement, operate, and sustain the MDM system to achieve the organization's data management goals.
- First, stakeholders must be informed about the MDM plans to ensure that everyone is aligned with it and that the necessary support to implement the roadmap successfully is gathered.
- Second, engage stakeholders from various departments, including marketing, sales, supply chain, finance, and IT. Their input is crucial in shaping the MDM vision and goals.
- Finally, secure executive buy-ins. This is crucial to the success of MDM plans because these entities secure resources for the MDM implementation and guide the entire process. The answerability to the senior executives keeps the performance on track.
Untangle Data Streams to Unify Retail
In the age of in-store purchases, social shopping, virtual experiences, and on-demand access to information, leveraging MDM to kickstart unified retailing is imperative. Stepping up with data democratization, transparency, and business intelligence is the way forward for unified retailing.
Even during the pandemic, 25 top-performing retailers took home more than 90% of one sector’s gains in market cap. With studies suggesting that only one-third of retail businesses have a well-defined data management system in place, now is the time to act and reap the benefits of MDM in unified retailing. This requires investing in the right tools and technologies, establishing clear data governance processes, and fostering a data-centric culture to improve data quality.
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