A store announcement blares over the PA system: Cleanup on Aisle 3! Off goes a floor associate, and the situation is quickly handled thanks to a seamless flow of relevant information.
When it comes to their own operational and marketplace data, however, many retailers find themselves stuck in a situation where historically entrenched data silos can’t talk to each other.
For all the buzz about data-driven decision making, one persistent challenge undermines its full potential for grocery and non-grocery retailers: the inability to share data seamlessly across departments.
According to the latest findings in PYMNTS Intelligence’s “Data-Driven Advantage: How Grocery and Retail Merchants Can Accelerate Growth,” a collaboration with Carat from Fiserv, more than half of retail and grocery merchants reported struggling with limited data sharing across departments. The situation has resulted in those retailers missing out on revenue growth boosts of up to 5%.
In an industry where margins are thin and competition is fierce, data is one of the few levers that can drive both efficiency and customer loyalty. Yet, its potential will remain unrealized if retailers don’t address the barriers that prevent seamless data sharing.
Read also: What Happens When 51% of Retailers Say They Aren’t ‘Data Ready’
The future of retail belongs to those who can make their data work smarter, faster and together. While most retailers (grocery and non-grocery) have access to advanced data and analytics tools, these resources are often siloed within specific departments. This lack of integration limits the organization’s ability to derive holistic insights and optimize decision making across all business units.
For 20% of grocery and non-grocery retailers, use of internal databases is often restricted to individual departments. This can leave other departments like procurement, customer service or logistics without the full picture.
Retail data silos tend to persist due to a combination of structural, technological and cultural issues.
The report found that 42% of retailers and 36% of non-grocery retailers have dedicated analytics teams that can analyze companywide data and help allow seamless data sharing across departments. This means that most rely on fragmented systems that do not communicate well with each other.
Non-grocery retailers pointed to supply chain inefficiencies, with 63% reporting that siloed data prevents them from responding to real-time demand changes. When departments fail to communicate, overstocking and understocking become more common.
Retailers acknowledged that certain departments, such as marketing and sales, may prioritize different metrics (e.g., customer acquisition costs versus operational efficiency), leading to a lack of willingness to share or align data objectives.
Security is also a concern when it comes to data fragmentation, with 47% of grocery retailers and 44% of non-grocery merchants reporting that increased security risks were a consequence of not having the complete, timely or ready-to-consume data their company needed in the last 12 months.
Read also: Retailers Master Data Readiness to Deliver Amazon-Like Experiences
Modern consumers expect a seamless shopping experience, whether they’re buying online or in-store. Yet, without unified data, retailers can’t anticipate customer needs effectively, a situation that can ultimately lead to frustration and attrition.
A unified platform is the cornerstone of cross-departmental collaboration. These systems integrate data from all areas of the business, allowing real-time insights that can be accessed by any department.
Breaking down silos isn’t just about technology; it’s about culture. Retailers must create environments where departments actively collaborate. Regular cross-functional meetings and shared KPIs can help align goals and foster a sense of shared purpose.
According to the report, 99% of executives experienced negative consequences from organizational data fragmentation, including diminished profit margins and lost revenue.
