As most business owners know, data is the key to increase eCommerce sales. Most online retailers are already making use of advanced techniques like web analytics to analyze the way that their customers interact with their company and to improve profitability and sustainability. But have they done all they can do to automate business operations?
While taking a data-driven approach to your business is certainly admirable, it comes with some risks. Paramount among these is that you might end up overwhelmed by the sheer amount of data you are collecting and processing. This is a huge problem across multiple industries, as we pointed out in our article on how to avoid data overwhelm, and the numbers back that up: according to recent research, 72% of business managers are overwhelmed by their job.
The solution to this is not to back away from technological tools. Quite the opposite. The key is to use the data you are collecting to automate some of your processes.
In this article, we’ll look at four key areas in which automating your systems can save you time, money, a load of hassle, and can even add value if you decide to sell your business. Then we’ll take a quick look at how to keep your business safe and secure in the process.
1. Inventory Management
Inventory management can be a time-consuming, tedious process. Yet it remains a core business function for retail businesses. Automating your inventory management has many advantages, including the ability to centralize your various stores and warehouses into one system. It can also have a direct impact on your operating costs because inaccurate information on stock levels can lead to costly mistakes in purchasing decisions. That’s why McKinsey & Company predicts automation will continue to have a significant impact on inventory management in 2020.
There are many different ways of automating inventory management.
The most basic implementation will use your POS system to automatically track stock levels. This information can then be linked to your project management software in order to provide real-time alerts on when new stock needs to be ordered. More exotic solutions include that taken by Amazon, who now use robots for order fulfillment, and the retail robotics company Symbolic, who successfully lowered labor costs by 80% by using robots.
2. Retail Auditing
In many retail businesses, district managers can spend up to half their week on store inspections, merely to audit and report their status to higher management. But that’s not the only cost of auditing: if retailers get their audits wrong, this can have major consequences for the reputation of your business. Chipotle, for example, ran into a major problem recently when they were found to be in violation of child labor laws. Not only was the company fined $1.3 million fine, but they were the subject of much negative press.
Building automation into your audit processes is an extension of the kind of inventory management we’ve described above. By extending technology into the everyday management of your stores, and by empowering your employees to use it, you can easily collect detailed information on how a store is operating. Reporting this information to higher management then becomes merely a process of pulling data from existing systems, collating it, and then producing an automated report.
Professional marketers will tell you that they can’t get by without automation, but many retailers are still relying on the old ways when it comes to marketing their business.
Automation can’t do everything for you, of course. It cannot design a marketing strategy, or provide you with a detailed outreach plan. Or at least not yet. But what it can do is execute your marketing vision much more quickly – and much more efficiently – than a human employee.
Marketing today requires that brands are visible and active across multiple digital platforms, and automation can help you with each:
- Email: You can create automated campaigns and sequences based on different triggers.
- Social media: You can set up a system to give you notifications when your brand is mentioned, and even use a ChatBot to automate responses to common queries.
- Content marketing: You can automate everything from the content creation process to the distribution of this material.
- SMS marketing: Similar to email, it’s possible to automatically send text messages to your customers with product recommendations, store promotions, and event invitations.
- Personalization: Consumers today know that you have data on them. That’s fine, as long as you use it to create personalized retail experiences. This is next to impossible without machine learning and automation.
Automation doesn’t just help with the everyday operation of your retail business. It also has a critical part to play in business strategy planning.
Once the three elements above – inventory management, auditing, and marketing – have been automated within your business, you will find that your systems are generating a huge amount of detailed data on the way that it functions. It, therefore, makes sense to go one step further, and use this data to produce detailed reports that can directly inform your business planning.
The key to doing this is to introduce another level of automation on top of those you have already deployed. By combining data from all of your systems – your inventory management, your marketing system, and even your payment processing system – you should be able to automate the production of reports that will give you a holistic view of the way in which your business is functioning.
These automated reports will then reveal the interconnections between various parts of your business in a way that is almost impossible from looking at the raw data. It could be, for instance, that a recent marketing campaign has led to a spike in demand for a particular product, but that your inventory management system was not configured to stock the requisite number of this item. By using automated reports, you will be able to spot such anomalies, and take action.
A Note About Security and Privacy
Finally, a quick word about security and privacy. Many retailers are hesitant to introduce significant levels of automation into their businesses due to these twin concerns. They fear that more technology will lead to more cyberattacks, and fear that collecting more data on their customers will intrude on their privacy. It’s easier to say a prayer and offload these worries to whatever standard defensive measures are included with your web host choice. The truth is that you can achieve a lot in the areas of security and privacy with just a little study.
Such concerns are understandable. The rise of spyware in the IoT has meant that retailers have been slow to adopt IoT devices. Equally, many small retailers feel they do not have the expertise to interpret privacy legislation like the GDPR thoroughly.
In practice, however, overcoming these fears merely requires that retailers do their research, and take reasonable precautions:
- Automated systems should be protected with firewalls, and their connection to your other systems should be encrypted.
- Phishing remains one of the biggest sources of vulnerabilities for SMEs, so you should also ensure that your staff is well-trained when it comes to spotting intrusion attempts.
- Large-scale automation will also require that you take advice from a dedicated cybersecurity company on the best way to protect your system from hackers and surveillance, and further automated systems to track and defeat malware and intrusion attempts.
Ultimately, any technological addition to your business environment will require you to develop new skills and knowledge, and automation is not an exception. The best approach is, therefore, to proceed at your own pace, and at a pace at which you can integrate security measures into each new system as you implement it.
The Bottom Line
Though we’ve pointed out above that automation has many business advantages, this can be put in a different way: in 2020 retailers need to start automating their systems in order to survive. The dominance of Amazon in today’s retail environment is not due, after all, to the unique products that the platform sells. Rather, the company has become a multi-billion dollar concern because it was an early adopter of automation technologies.
That observation also leads to another. After reading the article above, you’ve probably concluded that you will automate your systems one day, but not today. It might be that you are in the middle of a business cycle, or you are busy with seasonal marketing. But trust us, when it comes to bringing the benefits of automation to your retail business, there is no time like the present.