The vertical dilemma of retail!

The retail marketplace is defined by vertical segments, typically by size and type of retail. Each segment has its own unique challenges and characteristics. There is however one common trait that cuts across all verticals, that being the internal silos. Typically the term “Silo” in retail has referred customer data that is separated by how the customer engaged with the retailer. In store purchases were stored in a separate data silo than on-line purchases which resulted in the inability to get a single view of all a customer’s activity across all channels. This presents a problem when marketing to a customer.

However the silos I’m referring to are the internal silos that that causes retailers to be vertical rather than horizontally integrated companies. When I’m engaged by a retailer to determine the best POS solution for their stores my first objective is to determine if they have a vertical or horizontal structure. Do the departments of the organization, store ops, merchandising, IT, accounting and marketing understand each other’s role in the total operation, or do they operate in their own silo? The 4GL database structure that most POS use allow for data to be drilled into by almost limitless criteria. A single item can be traced back to the purchase order it was received straight through to the GL entry. Although each department has some unique requirements, systems that operate on enterprise architecture have eliminated the barriers of siloed data. Since data is horizontally accessible across all the departments there is sound business reason for a retailer to adopt a horizontal structure to increase efficiency and avoid duplication of effort. Silos foster tunnel vision which is a disrupter to the agile model needed to survive and grow in today’s environment.