What Are Data Silos in Retail?

8 minute read | 04 Jun 2024

By Boomi

Data silos are exactly what the phrase sounds like. They happen when isolated data collections are managed and accessed by specific teams or departments but cut off from the rest of the business. It’s a problem that quickly scales. Cross-functional transparency suffers as departments amass more and more data in different systems tailored to their specific needs. That leads to inconsistencies, blind spots, and business inefficiencies.

For industries like retail, data silos specifically can impede operations and profitability. Without access to comprehensive, accurate, and up-to-date data, retailers struggle to forecast demand accurately, predict customer behavior, manage inventories, and coordinate sales and distribution. Flawed projections can lead to product shortages or overstocking and missed revenue targets.

The solution lies in dismantling internal data barriers through modern, intelligent integration systems. Breaking down silos provides comprehensive analytics for a better-informed strategy.

Read on to learn more about data silos and their consequences, and discover the best strategies to integrate your disjointed information stores.

Why Are Data Silos Bad News?

Data silos create unnecessary roadblocks and process breakdowns across organizations. While ecommerce teams tend to collaborate more closely than traditional B2B operations, lack of data transparency typically is still an issue.

Today’s businesses aim to provide seamless self-service with innovative technologies like AI chatbots, consistent multi-channel engagement, robust supply chain operations, and integrated omnichannel platforms – all to drive more revenue at less cost. However, achieving ambitious targets becomes difficult when departments partition information into isolated data silos.

Shockingly, estimates show that a staggering 60% of an organization’s data is unknown or inaccessible to those who need it. When combined with siloed information, this “dark data” creates a disjointed and fragmented customer journey due to gaps in organizational knowledge. Teams managing various touchpoints lack the comprehensive visibility to deliver informed and unified customer experiences.

Data silos can impact business operations in the following ways:

Fragmented Customer Views

Without a unified, 360-degree view of target buyer personas, projections are unreliable, and customer experiences suffer.

Inconsistent Product Information

eCommerce platforms manage expansive product catalogs with details like descriptions, pricing, images, and specs. Product information grows inconsistent across channels when this data sits in multiple siloed sources.

Inefficient Inventory Management

Disjointed inventory data produces stock count inaccuracies, excessive overstocking, and stockouts. Without centralized inventory visibility across channels and warehouses, ecommerce players struggle to optimize stock levels, coordinate replenishments, and quickly fulfill orders.

Integration Challenges

Consolidating data from fragmented systems proves tremendously complex for ecommerce businesses leveraging multiple platforms. Data integration grows more seamless with centralized ecommerce dashboards.

Delayed Data Delivery

Manual, siloed reporting processes prevent decision-makers from accessing current data. This can significantly hinder supply chain agility, demand forecasting, marketing optimization, and sales projections.

What Are the Benefits of Breaking Down Data Silos?

Dismantling data silos to consolidate information builds a foundation for more intelligent decisions, frictionless processes, and delighted customers.

The key benefits of connecting fragmented data stores include:

1. 360-Degree Customer View

A comprehensive, 360-degree customer view lets businesses get predictive insights from all available data sources. There is one source of truth for a customer’s purchasing history, browsing behavior, service interactions, demographics, communication history, and more. With rich, unified profiles, retailers can deliver consistent messaging, relevant recommendations, and personalized service across all channels while gaining an intricate understanding of customers over time.

2. Enhanced Operational Efficiency  

Integrating once-siloed systems introduces tremendous process efficiencies by reducing the need for manual handoffs. Order information flows smoothly to fulfillment teams while inventory adjustments automatically sync across ecommerce platforms, warehouses, and accounting.

This accelerated coordination reduces lag, minimizes errors from rekeying data, and allows staff to focus on higher-value responsibilities. As mundane daily tasks give way to various methods of automating customer service, businesses can reallocate resources toward innovation.

3. Expanded Capabilities

Smoother data flows increase the bandwidth for advanced innovations, including expanded self-service options, AI-powered chatbots, omnichannel order management, and customer journey mapping. Businesses gain the flexibility to experiment with new initiatives, knowing they have access to the comprehensive data required to measure performance.

How to Break Down Data Silos in Five Steps

Integrating disjointed data across teams may seem daunting, but following a structured approach makes the process achievable. Here are five steps to guide your data consolidation efforts:

1. Assessment and Planning

The first step is examining where and how silos of disconnected data currently impede your business. Conduct interviews and audits to pinpoint problems like sales teams lacking customer data provided in service calls, supply chain teams having to manually re-enter order information, or inconsistent product details across channels. These examples spotlight where integration can have the most significant impact.

2. Discover Data Sources

Catalog all relevant data sources throughout your business. An integration platform, like Boomi, can automatically scan systems, cloud services, and APIs to reveal dark data and integration possibilities you may have overlooked.

3. Integrate Data

Armed with your data discovery inventory, work with IT teams to connect previously siloed sources, funneling information into a central data warehouse or customer data platform. Complement this aggregated data with a single source of truth for core records like customer profiles. Automate processes so all the applications have the latest information and synchronize changes with that source of truth in real time.

4. Establish Data Governance

Develop data governance standards aligned to policies and compliance obligations to balance open data availability with necessary restrictions. This guides decisions for data access permissions, acceptable usage, cross-departmental requests, and protective measures governing sensitive information. Appoint data stewards to oversee governance adoption across teams.

5. Deploy and Monitor

Once your technology infrastructure for linked, governed data is in place, focus on deployment, training, and monitoring. Track lead measures like data access rate by team and system synchronization success to ensure adoption stays on track. Also, monitor performance to confirm that your unified data delivers business results. Maintain open communication channels for user feedback to refine and improve processes continuously.

Choose Boomi Today for Seamless eCommerce Data Integration

As an ecommerce leader, you can understand why disjointed data poses grave threats to efficiency, decision-making, and innovation ambitions. The solution lies in actively dismantling silos by aggregating information into unified systems governed by common standards.

While this data consolidation journey involves coordination across teams, the long-term gains make the investment worth it. With Boomi, the process becomes vastly more convenient.

Boomi’s user-friendly iPaaS solution provides:

Learn more about how you can achieve frictionless data integration for cloud migration by downloading the in-depth Boomi integration checklist for cloud migration.