Retailers spend upwards of $26 million a year on data-related initiatives. Why? Every stage of retail relies heavily on big data, from predicting consumer trends, optimizing sales prices, investing in real-time advertising to managing inventory. We’re relying on data a lot, and this investment in big data isn’t slowing down.
In our recent Data Chasers Survey, we studied the use and opportunities of big data across multiple industries. Of all retail companies surveyed, 92% believe data is one of the most valuable investments their organization can make. Despite that strong optimism and vision, our survey revealed many believe the return on investment is lost because of wasted time and wasted data.
What’s Causing the Data Wasteland?
Despite the heavy investment, 44% of retail companies report they don’t act on their data at all. When we researched the contributors of this excessive waste of time, our survey pointed to three key factors:
- Outdated Tools
- Rogue Management Teams
- Unreliable Communications
Actually using data is resource intensive. When we looked at the time invested in processing data, the retail industry spent nearly 20-hours collecting, analyzing, and reporting on data every week. Of the companies surveyed, 44% believe the use of outdated tools as the biggest contributor to this 20-hour investment. When we looked at how outdated tools hinder data processing in our survey, we found:
- 57% use manual tools like sheets and word processors for collecting data
- 47% use manual tools for analyzing data
- 55% use manual tools for reporting data
Adding to this major time issue… many management teams act against the recommendations offered by their data! When presented with data, 33% of retail managers manipulated it to work in their favor. In other instances, 41% of retail managers made decisions counter to the data, and 21% ignored it altogether.
The third major factor that adds to excessive waste is a lack of reliable communications. Nearly 50% of respondents felt like management teams could reach decisions without the use of big data. Many of the questions asked by management teams could be answered with better guidance from upper management and stronger communications between departments.
Our study shows 44% of retail companies reported having limited visibility outside of their department, and only 20% of retail companies have the tools needed to report on data insights. This limited communication makes it difficult to share important information on efficient solutions.
Better Tools, Better Data
While the waste of data in the retail industry is high, 92% of respondents still believe that better use of data will directly impact their long-term success.
The single biggest improvement retail companies can make is upgrading their data tools. Per our survey, 76% of retail companies said improved data tools would allow them to perform their essential tasks easier. When we asked about complaints regarding their existing data tools:
- 46% of respondents believe their tools aren’t user-friendly
- 33% of respondents believe their tools don’t connect data to the action plans
With improved tools, retail companies can collect, analyze, and report on data faster. This allows data teams to work with greater flexibility to the needs of management.
In addition to improved tools for data management, retail companies can also use the tools for better communication and achieve alignment. Sixty-six percent of retail companies said a single view of data across the organization would allow them to do their jobs better. These tools will allow data and management teams to collaborate their information for new strategies.
Square Root surveyed more than 500 data users to find out if the big spend on big data is really paying off. Interested in learning more about our Data Chasers Survey and how you can act on your data better? Download our infographic.