The use of data has increasingly dominated the conversation around measuring business performance. Data is now widely available for understanding what your customers are buying, what they’re looking for, and what their customer journey looks like. With almost every function in the company looking at data to measure impact, it’s imperative to take a step back and understand how we are looking at data today. Do your decision-makers understand it? Are all teams on the same page? Or, does data reside in a high security “data detention center” accessible to just a few analysts within the company?
The more that your team interacts with customer data, the more that your business decisions are driven by data – big or small. Not only can data literate decisioning increase the return on investment on your activities, but it also aligns all the functions within your organization towards a common goal. You’ll hear less of “I don’t know why this happened.” and more of “I know how we can attack this.”
Before we discuss how to embed data literacy into the DNA of your company, it’s essential to understand what it is.
What is Data Literacy?
In simple terms, data literacy is the ability to read, understand, analyze, argue with, and derive insights from data. Most consumer commerce companies gather a lot of data, but more often than not, fail to organize it or understand it.
With a great amount of data comes great responsibility. Are you emphasizing the quality of data that you base your decisions on? Acting on poor data can sometimes cost you more than acting on no data whatsoever. A recent report found that data debt is a problem for 78% of companies, out of which only 28% accept that it’s a significant problem.
Data literacy is the bridge between raw data and an optimum business plan. In 2019, Gartner predicted that by 2020, 50% of organizations will lack sufficient Artificial Intelligence (AI) and data literacy skills to achieve business value. While we wait to see how this plays out, organizations falling in this bracket will slow down, with data illiteracy holding them back.
Is your consumer commerce business data literate?
Being data-driven only brings success when there’s a data literate force driving the team. It is no longer acceptable for consumer commerce businesses to accept “gut instinct” as the means for making decisions. Anything short of data literacy could lead to a series of very, very bad decisions. Keeping a few simple points in mind will keep you on course. Let’s dive in.
Looking at data as an enterprise asset
Data is not a by-product of your actions. Historically, many leaders have made decisions based on a hunch and used data to see how it pans out. However, now you can answer questions like “Which is my best-selling product?” or “What is the relationship between the sales of wine and cheese?” using smart Business Intelligence Tools that leverage AI and Machine Learning (ML) to make it happen.
Data comes before, then after
You wouldn’t want to be the merchant making product and pricing decisions based on vanity metrics. Similarly, you wouldn’t want to be the guy in the room that scrambles to justify a decision with data. It’s a gamble – it may or may not work. A decision driven by data literacy helps you analyze exactly what went right or wrong to realize the ROI on your efforts.
Leaving old habits behind
This is a needless-to-say statement for many consumer commerce businesses, but often needs to be reinforced. We start with trying new practices and ultimately fall into old habits – which also happens with reporting. Generating reports just for the sake of generating them often takes your sight off of important metrics that you needed to have tracked all along.
Let’s say you’re tracking your sales numbers every month. The number of customers is increasing, and you think everything is going well. A few months later, these numbers fall rapidly, and you scramble to understand what happened. Had you known about the falling customer retention from the start, not only could you have taken care of it, but your customer base would be much larger by now.
Spending time on the same kind of data just because you’ve always done it can cost you in unimaginable ways. However, this doesn’t mean spending days looking at every data point or hiring a large data analysis team to take care of it. Data coming in from all channels can be channeled into your business intelligence platform that can proactively highlight anomalies, forecast data, and help you keep track of data from different databases on a single platform.
Access to data
Today, there’s no business roadmap that cannot be fuelled with data – from marketing to sales to support, it’s everywhere. Say, you’re a restaurant that wishes to run a campaign for the product that sells best. The first thing you would need is sales data – both online and offline. Now, you spend days asking for data from various people and getting the right approval. By the time you get to segregating that data for proper targeting, it will be stale. In some cases, the right time could be long gone.
A smart digital assistant could solve the problem for you. Within seconds, you can get answers to impactful questions like “What is my highest selling product in Wyoming?” or “What were my net sales this year in a given category?”
Having instant access to data like this would not only save time but allow your data literate team to explore new ways to create impact using this data and come up with innovative solutions.
Making decisions with past, present and future data
The #1 mistake associated with decision-making is looking at past data for today. Would you want to use a grocery list from 2 months ago to make a shopping list today or forecast what you would need in the future?
Decisions based on outdated data could often be wrong and set you back miles behind your competitors.
In line with the last point, intelligent BI Platforms allow us to analyze and forecast from millions of data points in seconds! AI Demand Forecasting can provide highly accurate day-of-week and time-of-day forecasting at an item/store level. Democratizing data in an organization driven by data literacy can help you harness the true power of data and innovate faster – giving you an edge over your competitors.
As Adrienne Michelson (Analyst, DataInsight Partners) puts it – “Instead of just saying “data-driven” we should expect “data literacy” because being driven by data without appropriately understanding statistics, bias, and methodology can lead to making choices that hurt instead of help!”
Learning how to read, work with and draw insights from data doesn’t mean you need to be a data scientist, or someone in a technical position. Instead, emerging analytics platforms like Hypersonix can democratize access to data and accelerate revenue growth. Hypersonix can help decision-makers in consumer commerce companies save costs on all fronts – be it time, effort, or money.
A lot of money is left on the table due to siloed decision-making based on gut-instincts. In addition to saving costs, you can generate higher revenue for your company through personalization, targeted promotion, price optimization, and much more!
Looking to know more? Let us show you how this works. Request a demo now.