**London**: A new report indicates that over half of grocery and retail merchants face significant challenges in sharing operational data, leading to potential revenue losses. The persistence of data silos is identified as a barrier to effective communication and customer satisfaction in a competitive industry.
A recent report by PYMNTS, in collaboration with Carat from Fiserv, has unveiled significant challenges faced by grocery and retail merchants in effectively utilising their operational data. The study highlights that more than half of retail and grocery merchants struggle with limited data sharing across departments, leading to potential revenue losses of up to 5%.
This issue arises from entrenched data silos within organisations, which prevent departments from communicating effectively with one another. In an industry characterised by thin profit margins and fierce competition, the effective use of data is critical for driving both operational efficiency and customer loyalty. However, the report suggests that many retailers are not realising the full potential of their data due to barriers impeding seamless information sharing.
The findings detail an “Accessibility-Utilisation Gap,” indicating that while most retailers possess advanced data and analytics tools, these resources are frequently restricted to individual departments. This insularity can hinder other departments—such as procurement, customer service, or logistics—from accessing comprehensive data insights that inform their strategies. Specifically, 20% of grocery and non-grocery retailers reported that their access to internal databases is limited to specific teams, preventing a holistic view of operations.
Technological, structural, and cultural factors contribute to the persistence of these data silos. The study revealed that 42% of retailers and 36% of non-grocery retailers have dedicated analytics teams capable of analysing companywide data. Despite this, it appears that most retailers rely on fragmented systems that fail to integrate seamlessly, making it difficult to respond effectively to market demands. Non-grocery retailers, in particular, highlighted supply chain inefficiencies, with 63% identifying siloed data as a barrier to adapting to real-time demand changes, resulting in overstocking or understocking scenarios.
The report also noted that varying priorities among departments foster reluctance to share data. For example, marketing teams may focus on customer acquisition costs, while sales departments may prioritise operational efficiency metrics, thus complicating alignment around shared objectives. Additionally, security concerns arise from this fragmentation, as 47% of grocery retailers and 44% of non-grocery merchants reported heightened security risks associated with delays or deficiencies in obtaining timely and accurate data over the past year.
Modern consumers increasingly expect a seamless shopping experience across both online and in-person platforms. Without unified data systems, retailers struggle to anticipate customer needs, which can lead to dissatisfaction and potential loss of clientele. A crucial solution identified in the report is the establishment of unified data platforms that integrate information from all facets of the business, enabling real-time insights accessible to all departments.
However, the challenge of dismantling silos extends beyond technological solutions; it involves fostering a collaborative culture within organisations. Promoting regular cross-functional meetings and setting shared key performance indicators (KPIs) are essential to align goals and cultivate a cohesive organisational mission. The insights from the report reveal that 99% of executives have experienced negative ramifications due to data fragmentation, ranging from reduced profit margins to lost revenue.
Retailers are encouraged to consider the benefits of breaking down silos, as fostering an environment of shared data access and collaboration could enhance their operational capabilities and improve the overall customer experience.
Source: Noah Wire Services
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