Better Retail Stock Management through Master Data Management
In this article we will explore how Master Data Management done right can tighten up your stock management processes and make your retail business more efficient. If any of this is new to you; check back to understand What is MDM and how it translates into a retail environment.
The primary objective of any retail business is to sell things. Buy in your stock, mark it up to cover your costs, add a profit margin, sell it, then sit back and wait for money to come rolling in. Easy right? Well not exactly, a single product can have countless data points each of which needs to be captured, tracked and reported on to keep your retail machine operating smoothly.
Managing your stock inventory using Master Data Management is the gold standard of stock management in the retail industry. MDM seeks to track each unique data point related to any single item as it passes through your business, no matter how big or small. You’ll be able to see where a product has come from, when it entered your system, how much you paid for it, the margin you add to it, any related promotions, when it was sold, and for how much. And that’s just for one product. Times that by the number of units of any single product and multiply that number across each of your product ranges. That is a lot of data.
The market size for global big data analytics in retail was valued at $4.43 billion in 2019, and is projected to reach $17.85 billion by 20271. Rightly so, a lot of weight is put on data in the retail space these days. Mckinsey reports that marketers are spending a staggering $50 billion on big data2. You probably don’t have $50 billion lying around. However, you do still need to be able to manage your stock accurately and run a profitable business. Enter MDM.
MDM done well means the outputs of the various retail systems that rely on product data can be trusted, giving everyone greater confidence about key data elements, such as number of units sold, margin made and impact on revenue when running promotions.
It gives you a holistic, top-down view of stock availability and ranging across your retail estate, ensuring stores have the right products on the shelves. The days of time-consuming manual stock takes are fast disappearing. There is no more over or under ordering of fast and slow-moving stock, and a retailer has clear sight of the products giving the best margins. Full visibility, from the shop floor to the boardroom.
For online or multichannel retailers, the benefits run deeper. Google estimates that 70% of consumers research online before purchasing in-store3. MDM gives a retailer confidence through having joined up product data, that their customers are able to do their research from home, check availability at stores near them, purchase or reserve online and then go to store to collect the product. This seamless experience is increasingly demanded by customers, and being adopted by retailers.
Owning and running a retail business or store is hard enough. MDM takes away some of the day-to-day tasks, worries and stresses. The foundational data is used to drive sales, purchase stock and underpin promotions, meaning you can focus on delivering a seamless on and offline customer experience that’ll build your brand and encourage repeat custom.
This article is part of a series aimed at demystifying the sometimes-complex world of Master Data Management. At rascal we work hard to avoid jargon and make our approach as clear as possible. To discuss how we do this, or to suggest a topic you think needs clearing-up, please get in touch