Are data dams blocking omni experiences?

Eduardo Silva
21 November, 22

Retail is a fast changing industry, and to keep up, retail executives need to pay attention to the trends. Trends, for example, such as that omnichannel shoppers have a 30% higher lifetime value than those who shop using just one channel. Customers are starting to expect businesses to offer a seamless experience across all of their available channels – from social media to the last mile.

However, many retailers aren’t ready for this change and it isn’t a transition which can occur overnight. It can’t be easily adopted by businesses which face information blockages, otherwise known as ‘data dams’, which many retailers don’t even know they have.

What is a data dam?

Imagine data as a river of information, which nurtures its surroundings and allows its ecosystem to sustain itself. However, there’s a huge dam separating one part of the river from the other, meaning the inhabitants of each side cannot see or interact with the other. While both sides are self-sufficient, neither can thrive because they don’t learn from their counterparts or help them grow.

This is the crux of a data dam. When a company operates multiple channels – both an online and brick and mortar store – there is often a critical disconnect between how those two parts communicate, preventing the sharing of vital customer, product and stock information.

Impact of a data dam on retailers

Avoiding data dams is critical for omnichannel success for the long-term. There’s a few ways in which retailers can be severely impacted by data dams:

  • Disconnected customer experience

Creating a truly personalised shopping experience which resonates with customers is critical. In fact, companies with strong omnichannel engagement and communication retain 89% of their customers – compared to just 33% for companies which have a weak or no strategy. Part of improving that engagement is ensuring the data from one channel flows seamlessly to another. Disjointed customer experiences are driving away customers, who have now come to expect efficient and frictionless service.

  • Lack of communication between systems

A retailer may typically operate by allocating some stock specifically to one channel, and the rest to others. But overall, the total stock belonging to your company remains the same even if it’s distributed. When drawing from the same source across various stores, the brand is at risk of overselling and not realising it until it’s too late.

A data dam amplifies this problem. If a retailer has two separate POS systems across two channels, it’s essential to do the due diligence to make sure those systems maintain a feedback loop, so when a sale goes through in a brick and mortar, your online store is made aware and vice versa.

  • Poorer customer service

Shoppers have high expectations of the retail experience and low patience. In fact, 96% of customers will leave retailers due to bad customer service.One of the biggest causes of poor customer service faced by omnichannel businesses is data dams.

If following an online purchase, the store associate can’t then access the information on the account or the order, that’s going to confuse the customer and discourage them from purchasing from them again. 

Identifying and avoiding data dams

Once a retailer knows what to look for, they’re one step closer to eliminating data dam problems. One way to achieve that is by paying close attention to their customer feedback; do they recognise any of the problems stated above in what they’ve reported back?  Here are some of the most effective ways to identify and fixing the issues of data dams:

Analytics

Business intelligence platforms and KPI analytics solutions can help identify and build defences against data dams by offering real-time and legacy insights. This enables a comparison of the performance of one channel against another, finding ways to improve both through compatibility with the other. But, whilst analytics are a step towards fixing the problem, any issue will need to be patched once identified.

Stock control

Another way of combating data dams is by investing in stock, inventory, and fulfilment solutions. To solve the lack of communication between systems caused by data dams, 

retailers need a system or platform which unites all individual channels and stores with one stock pool. This allows each channel to draw from one shared resource, avoiding one of retailers’ biggest challenges of overselling and underselling.

Integrations

Data integrations connect disparate apps, systems, and tech solutions together so that information runs from point to destination seamlessly. If we had to narrow the causes of data dams down to just one, it would be due to poor integrations, not having a holistic view of the business, and no way to share the data between the various channels. 

Good integrations, however, are like interconnected, efficient roads which share the data. They are the best way to communicate between an online and offline tech stack – by making sure data gets where it needs to be. In this way, brands can create a powerful, informed omnichannel experience and break their data dams.

Integrating data unlocks barriers to retail success

All retailers have data spread around many ecommerce systems, and integrating their retail estate is currently one of a retailer’s biggest challenges.  Retail tech teams should start by performing an assessment of their entire retail estate. 
Investing in analytics or a platform which simplifies the integration of their technology stack, will help them to synchronise customer channels and make data dams – whether they’re aware of them or not – a thing of the past.

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