Data is the New Oil
PDI discusses the importance of an abundant digital resource
Brought to you by PDI.
Just about everything consumers do generates data.
Phones or wearables record the number of steps and distance joggers run. Amazon remembers every purchase every customer has ever made. Point-of-sale (POS) systems record every item that passes under their scanners. That information is valuable for a lot of players, and convenience stores are generating treasure troves of data every day.
“Retailers take in a bunch of data, and there are ways that they can monetize it,” said Justin Baxley, retail product manager for PDI. “Some of that revenue is generated by helping them run their businesses better, and some of it’s going to be through selling it or brokering it to people who want to use that data for other reasons.”
Ideally, retailers should have product-specific data going back at least three years. That way, Baxley said, retailers can “bring that data together into a much more sophisticated picture of what next week’s going to look like than if I was just looking at this year.” He said retailers should factor in the current year baseline of sales, seasonal effects on sales and the effects of national holidays and events to forecast sales as accurately as possible.
Once operators have a more complete picture of past sales and the ability to forecast more accurately, they can make better informed labor and inventory decisions. “It’s not necessarily about reducing the labor, but rather making sure that the allocation of my labor is appropriate for a given time,” Baxley said.
Keeping accurate and specific sales data can also improve loss prevention. “If you notice all of a sudden that Joe has a lot more voids and cancels on the register than Jane, you’re probably going to start interrogating things like your DVR around what’s going on when Joe’s at the register.”
Operators can see significant savings and more efficient operations if they put accurate data to good use, but they can also generate direct income by enabling the aggregation of their data. “Operators have a ton of data about themselves,” said Baxley. “Folks like IRI bring that data together across demographics, across geographies, and are able to answer bigger questions than what you can learn about your own business.”
Suppliers and manufacturers are also interested in purchasing data. Baxley sees these potential data customers as a growing opportunity. “Generally we see more and more manufacturers who think that if a retailer wants to use this data to make better decisions, then the manufacturers and suppliers are going to have some of the same problems to solve.”
As technology advances and more everyday activities become automated, data will continue to appear naturally. Like crude oil, it should be dug up, refined and put to use powering the convenience and petroleum industries.