The five W’s of effective data management for retailers!
Retailers are being inundated with articles about Business Intelligence and effective data management. First let’s look at a simple definition: Data is defined as the facts and statistics gathered for future reference. Most independent retailers have the tools at their disposal to collect data but the challenge is to use that data to effective positive changes in their businesses. I think using the same principles that apply in journalism will work for retailers as a guide for effective using data. The five principles are: Who, What, When, Where and Why. Let’s see how they apply to retail data.
Who: The ‘Who” is very straight forward. A retailer should attempt to collect as much information about every customer. We will explore more deeply the value of data as we move through the W’s but suffice it to say data is the gold of POS systems. The effective use of customer data is the driver for retaining customers and growing your business from them. Develop a “quid pro quo” approach with customers; Ask them for their data in exchange for some benefit. The simple rule is “If you don’t ask you don’t get”
What: “What” refers to exactly the information you should collect that will yield the biggest benefit. The low hanging fruit is transactional data. Knowing exactly what people buy is the basis for developing marketing campaigns. The goal of any campaign is to build a stronger relationship with your customers which results in a great share of their wallet. The best campaigns are designed around creating additional visits and creating incremental sales. Using a customer’s purchase history allows you to tailor your offers and make them relevant. This is a short list of key customer metrics:
• What they bought
• Frequency of purchases
• When they last visited your store
• Average transaction and gross margin per transaction
• Emails addresses
We will explore the “When and Why” is the next posting.