Data silos between commercial and marketing teams are leading to missed opportunities for retailers according to new research by product performance management (PPM) platform ROI Hunter.
The survey reveals nearly a third (32 per cent) of retail marketers are still basing their advertising decisions on guesswork or gut feeling, with 46 per cent of ads run, on average, failing to deliver the results needed.
The need for guesswork likely stems from the fact that many retailers lack the full picture of how their products are performing compared to their marketing efforts. Despite most retail marketers saying they deploy data-driven ad strategies, only 36 per cent say they understand which of their products have the highest and lowest margins, only 32 per cent know which products are their most profitable, and over a quarter (29 per cent) admit to not knowing their best-selling products.
Nearly a fifth (17 per cent) also say poor collaboration between commercial and marketing is a top challenge and 55 per cent say they struggle to access data because it is separated across the company. This suggests that data is siloed between departments, with marketing and commercial disconnected, limiting campaign opportunities.
The problem is significantly higher among fashion retailers, with nearly half (45 per cent) of fashion retail marketers admitting promotion decisions are based on a guess or gut feeling. Misalignment between departments is also more prominent, with 29 per cent citing poor collaboration between commercial and marketing as a top challenge and 61 per cent admitting to struggling to access data.
“There’s a clear misalignment between marketing and commercial teams among retailers. In the race to grab shoppers’ attention, marketers are rushing out campaigns without full visibility into product performance. Retail leaders need to take steps to eradicate silos across departments and enable shared access to product-level data so both departments can work together to promote the items that will perform best for their goals, ” says Karel Schindler, CEO at ROI Hunter.
Misalignment among retail departments is not just being felt by retailers, but by shoppers too. Over two-thirds (67 per cent) of 2,015 consumers surveyed as part of the research say they have been served digital ads for out-of-stock items, and 70 per cent for products with low availability. A fifth of shoppers say this happens often, suggesting a large proportion of retailers are spending their marketing budget promoting out-of-stock or low-stock items.
Product availability is also named by retail marketers as the second biggest reason why ads are perceived to underperform, reinforcing the disconnect.
Share