I recently attended an IDC analyst day event, and it got me thinking about how the volume of data has exploded since I started in the Retail / Consumer Goods industry 25 years ago. When I started my career, we had sales data, cost data, inventory data, some promotional data and if you were really lucky you had some customer research data.
Then came the evolution of customer loyalty programs and customer browser data. According to IDC, Retail is the second-highest data-generating industry and they expect it to continue growing at a 26.9% CAGR until 2026.
As someone who has been a big supporter of using data throughout my career, I am starting to wonder if there is too much data available and thus causing data overload. I’m not alone: The Wall Street Journal recently called this the “Data Deluge” and companies are sinking in it. Not only is all this data very expensive to process (IDC estimated that $290B was spent on big data and analytics in 2022), but I worry that it’s making it difficult for business leaders to access the data that really matters.
We now have so much customer data that we have lost focus on the importance of the core data of sales, profit, inventory, pricing, supplier obligations, etc.
Every day I continue to be surprised by how companies have taken this core data (all data except customer data) for granted with no plan on how to leverage it to stay competitive. Contract data, for example, is arguably the cleanest data that exists in an enterprise—it’s the single source of truth for all third-party relationships in an organization.
As you think about the product journey that ultimately ends up in our homes, it all starts with a contract between a seller (manufacturer) and a buyer (Retailer or e-tailer). In these contracts lies the foundation of business.
Here are some examples of how leveraging contract data can be beneficial for a retail company:
- Employee visibility to their negotiated KPIs such as expected service levels, delivery lead time, pricing (either fixed or commodity-based), and financial incentives. By having this information easily accessible, it helps employees focus more time on serving their customers.
- Faster contracting. By leveraging digital contract management systems, companies can streamline the contracting process and reduce time spent on administrative tasks. This allows employees to focus on more strategic activities that drive business value.
- Integrating data across all of their back-office and front-office software. By integrating contract data with other business systems, companies can gain a more holistic view of their operations and make more informed decisions. For example, by linking contract data with inventory data, retailers can better manage their supply chain and ensure that they have the right products in stock at the right time.
In addition to these benefits, contract data is also incredibly valuable for managing risk and ensuring compliance. By having a clear understanding of supplier obligations, companies can ensure that they are meeting their contractual obligations and avoiding any potential legal issues.
In conclusion, while customer data is incredibly valuable for driving business success in the retail industry, it's important to not overlook the importance of core business data, such as sales, profit, inventory, and pricing. Contract data is a valuable source of this core business data, and leveraging it can lead to improved operational efficiency, accuracy, and profitability. By investing in the right technologies and analytics capabilities, retailers can gain insights from all of their data sources, leading to a more complete understanding of their business and customers.
To learn more, visit our solution page for retail.