Retailers facing data challenges

Shoppers need to see the benefits of storing their data, say retailers

In a tough economic climate, retailers need to do all they can to understand their customers. But for many firms, the technical complexity of analysing customer data remains a challenge.

Having a comprehensive view of shoppers’ behaviour can boost service levels, customer retention and market share, but this is a low priority for many retailers faced with the costly issue of legacy technology.

At Aurora Fashions ­ previously Mosaic Fashions, owner of brands such as Karen Millen and Oasis ­ client data is obtained via disparate systems that support the web site, store card schemes and the customer relationship management (CRM) functionality built into the point-of-sale platform.

According to the firm’s chief information officer John Bovill, the best data is obtained through the web, followed by card data and lastly data extracted from tills.

“We are traders and a lot of what we do is about maintaining trust with our customers. We therefore have to ensure they have the option of opting out of providing us with their data,” Bovill told Computing.

While Aurora’s three main pools of customer data are not integrated, the firm relies heavily on traditional communication about trends from individual stores, as well as market research, according to Bovill.

“Things are changing in that space, but until now it has been difficult to understand and make meaningful sense of customer information,” he said.

“There is also a considerable overhead linked to making that data usable and there are higher priorities on the agenda now. The technology is not a problem ­ the issue is how to sell the advantages of collecting information in a way that does not disrupt the transactional process. It is more a matter of cultural change.”

Marks & Spencer (M&S) also uses a variety of in-house applications to manage customer data.

According to Stuart Crawley, database manager at the M&S loyalty group, at present “a load of systems bolted together” process customer details from a marketing database, point-of-sale systems and a loyalty scheme attached to financial arm M&S Money, a wholly owned subsidiary of HSBC.

“It would not be difficult to overlay the existing systems with a single platform, but it would be mainly replicating the functionality of our existing in-house software. And the cost of replacing everything is not justifiable,” said Crawley.

“Our systems can provide about 90 per cent of that of any CRM platform ­ but maybe not as easily or on such nice screens.”

Crawley said the best source of customer data is the information obtained via the loyalty scheme, which is associated with its branded credit card. A system sits between M&S and HSBC and analyses data such as clients’ points balance.

“The quality of that data is as good as it can be,” he said. “Customers are more likely to keep us advised of changes in their details because they see a reciprocal benefit in keeping us updated.”

But managing so many different systems is not easy. For example, Crawley highlighted the complexity of implementing changes that need to cascade through all the interconnecting systems.

According to Forrester Research principal analyst George Lawrie, the best way to manage client data is through system consolidation.

“From a technical point of view you cannot hope to have a single point of entry for all the different elements of customer data, so you must collect different elements from different transaction applications in a hub,” he said.