Control Information for Retail Advantage

Barcoding the business

For many years, all manufacturers coded products differently. This meant it was extremely difficult for retailers to automate their supply chain and stock management, as they had to cope with different approaches from different suppliers. Approaches such as barcodes were suggested but used sparingly and without consistency until one major retailer, Walmart, dictated their use to its suppliers. The barcode is one of the great success stories of Master Data Management (MDM) since it provides a technically efficient way to differentiate every single product in the world. The barcoding system comes with a central repository for barcode and product information and has been extended by standards organisations, such as GS1, to provide a single global view for producers, retailers, and – increasingly – by consumers themselves. The change in the use of barcodes is an example of business change enabled by technology. The challenge for retailers today is to take the level of rigour used in product barcoding and apply that to the rest of the business.

The three domains of information mastery

Mastering information through MDM in retail is about solving three distinct challenges, each of which requires a change of approach in a specific area of business and delivers specific sets of advantages to a retailer.

Mastering your clients

A customer walks into a store, checks in via FourSquare and starts to shop. The store’s marketing analytics kick in, linking the check-in to the customer’s loyalty account; as the customer walks around the store, they receive an update via MMS for a set of vouchers to discount some higher value products (which they have previously bought in combination with other high-value products). The customer uses the vouchers to buy the additional high-value products, resulting in a larger basket value than normal. This future vision of the integration of the retail experience with social media is not far away. Already, retailers and brands are marketing via social media; by bringing social media into traditional retail environments, it becomes possible to more effectively sell, market and service your customers. To realise this future, there must be a robust Customer Information Governance group within the business, which agrees the policies for identifying customers, matching, merging and accessing the federated information of the customer who lives on the web. Only once it is clear how the organisation will address these challenges will an MDM effort be ultimately successful.

Mastering your enterprise

One store, one brand, one identity: that is the goal of any successful retailer. From store layouts to distribution networks, the information that describes all of the core assets of the company is vital to planning for the future and reacting to the present. This means that the core elements of the business need a single definition and a single set of policies and procedures.

Without strong MDM within a retailer, the ability to manage the organisation as a single company is significantly hampered and inefficiencies created. By taking control of this internal information, it becomes possible for the retailer to create what can truly be called a ‘single company’— both internally and to the market— and thus deliver the economies of scale and consistency that today’s competitive marketplace demands.

Mastering your suppliers

The third part of information mastery is in managing suppliers, the supply chain and procurement. Here, the product hierarchies defined for the enterprise become tools in negotiations as they demonstrate the real-world consumer substitution practices. The mastering effort is externally focused, often using elements such as GS1 and the various global data providers to provide your organisation with a robust and visible set of information.

Mastering in the supply chain area of a retailer is one that can deliver significant benefits: often the inefficiency created through poor master data represents a significant percentage of the overall costs of a retailer. Not taking control of master data in the supply chain area, therefore, is the equivalent of running stores without stock; it has a direct impact on the bottom line of the company.

Starting to master information in retail

Capgemini’s approach to MDM is based around the ‘five pillars of MDM’. This provides the framework within which an organisation can reach a successful operational MDM solution. The first, and most important, step is to break the problem down into its three business domains and engage as a business around those domains with a thin coordinating layer. These domains then concentrate on establishing the measurable objectives against which MDM will be measured. Today, over 80 per cent of MDM projects are not justified to the business. Capgemini’s experience is that this usually occurs because those projects did not have clearly measurable business objectives from the start. Once the domains are clear and each domain has its objectives, it is time to understand the business information model that can meet those objectives.

Conclusion

Retailing is now an information business. As elements like social media change the way consumers spend and with the ability of retailers to make significant savings within the supply chain area, this separation of information management from the business cannot continue. Fortunately, the practices to solve these problems are already known to retailers. The next generation of successful retailers will be those who consider the quality and trust of their information to be an integral part of their business success.