Saturday, June 6, 2020

Mike Ashley’s House of Fraser success will depend on data integration

The retail news has been dominated by reports of the buyout of House of Fraser by Mike Ashley, the owner of Sports Direct for £90m, and his vision for creating the Harrods of the High Street. 

Derby based global retails software developer, Data Clarity believes that if he can also harness the power of the data that this empire will be amassing on its customers, his vision of creating the Harrods of the High Street may well be achieved.

Ashley’s brands are now so diverse it may be hard to see how each will truly complement each other, however the astute observer will see how with Sports Direct at the lower end of the market, and with stakes in brands like French Connection, Flannels and Debenhams, the retail magnate has been canny in creating his own supply chain. If he can also harness the power of the data that this empire will be amassing on its customers, his vision of creating the Harrods of the High Street may well be achieved.

Though this data solution is one that many retailers are struggling to crack due to the advent of omni channel buying, there are software solutions available that can harvest data from a myriad of sources in a GDPR compliant manner.

Mr. Ashley has a varied portfolio of investments, including in department store Debenhams and the retailer French Connection. In addition, he owns the lingerie chain Agent Provocateur, as well as the clothing chain Flannels, which sells brands such as Burberry London, Fendi and Sophia Webster.

Ashley’s challenge will be to understand the buying behaviour of the customer that is willing to pay hundreds of pounds for his or hers Flannel suits and Dune Shoes from House of Fraser for their business wardrobe, yet is just as happy to buy discount sportswear for the gym, or cheaper sports accessories such as golf balls from Sports Direct because they are an average golfer losing balls all the time!

The above marketing persona, of a high flying business exec on a six figure salary, who also shops at Sports Direct, would be to many marketers an unlikely a combination you’ll ever imagine! But by being able to combine data from disparate sources, it’s the kind of ‘Golden Record’ intelligence that all multi brand retailers seek to uncover.

Kevin Carrick, from global retail software solutions provider Data Clarity has been helping leading retailer, Paul Smith develop better insights on their customers. His company has developed an award winning retail software solution called Clarity Omnivue which is delivering the insights he believes retailers will need to be a success.

He said: “Bringing together data on the scale required to integrate Sports Direct with HoF and other brands and franchises is a huge project. Projects like this are vital and are not unsurmountable given the time, budget and expertise to plan and schedule the integration. It’s more about planning for the long haul. High street retailers face a never ending challenge integrating data without duplication from the myriad of channels that are now available for customers to buy from.”

It’s very common for retailers to be left with a glut of stock at the smaller or larger end of the size scale that will be destined for the end of season sale. This is costing the retailer dearly in massive discounts on unsold stock or they are bulk sold to discount stores (like Sports Direct).

This is because retailers don’t know enough about the size profile of their customer base and therefore place bulk orders for all sizes with manufacturers and allow a percentage into their margins for unsold stock.

Retailers that invest in software that provides real time insights in to their merchandising and can marry up all the data they store on an individual customer from different platforms and databases into one 360-degree view of their purchasing behaviour will undoubtedly perform better.

Carrick added: “Access to this level of data would have a dramatic effect on production stocks, sales, personalized marketing and may even be the death knell for the end of season sale.  Despite the fact that retailers are gathering this information with every purchase their customer makes, the reason they still have to order sizes they end up not being able to sell is because retailers are still grappling with the challenges presented by omni-channel retailing.”

Very few have succeeded in being able to integrate all their various back-end systems from across the company to provide a seamless customer experience and insight across all channels.

If Ashley can crack this nut, and help his all of his brands communicate with their customers in a bespoke and personalised manner to maximise his share of income from their disposable income, rather than offering the never ending discount ‘sale,’ – profits can be maximised and customer loyalty developed.

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