Retailers are prioritizing robust data governance to manage growing data complexity and security risks
New Delhi: Retailers are grappling with the complexity of how to consolidate and optimize data that is currently generated through multiple touchpoints and channels, from payments to checkouts and customer information to customer preferences.
The rising importance of data-driven decisions which are becoming increasingly critical to understanding consumer behaviour and driving sales has made robust data governance a critical priority in the retail sector. On top of that, many of the data points involve external systems requiring intricate integrations, which is the process of connecting software, hardware, and applications to create a cohesive infrastructure, experts said.
Therefore, data governance at present poses a significant challenge to retailers, especially with real-time data becoming essential for conducting omnichannel retailing. Data governance is a set of policies, practices, and tools that help organizations manage their data throughout its lifecycle.
“Data collection and consolidation is the most difficult part, considering data is being collected at numerous touchpoints, mostly via external systems that require integrations and interoperability,” said Zahid Ansari, VP of Information & Retail Technology at Melbourne-based fashion brand Forever New. Ansari further noted the difficulties of integrating legacy systems — which are outdated computer systems, software, or hardware that are still in use, even though they are no longer scalable or up to date — and third-party platforms, which retailers generally use in areas such as enhancing sales and increasing retun on investment (ROI). These integrations are often costly and complicated.
While handling and managing data is important, it is equally important to safeguard the same, as this also comes under the major principles of proper data governance. Cybersecurity remains a significant concern, with Fortinet data revealing that 24% of cyberattacks target retailers, exploiting the vast amounts of sensitive information they store. “Securing data and privacy against breaches is critical but challenging,” Ansari added, pointing to the growing threat of cyberattacks as a major focus area for retailers.
The need for better data management has also been emphasized by new regulations such as India’s Digital Personal Data Protection (DPDP) Act. The DPDP Act is a law in India that protects the rights of individuals to safeguard their data while also allowing for the processing of data for legitimate purposes. The DPDP Act was passed in August 2023 and is expected to come into effect in 2024.
Satish Karunakaran, Director of Transformation at Pepe Jeans London, said the regulation has prioritized data security. “Customers are becoming more aware of data security issues, and we need to assure them that their data is safe at all times,” Karunakaran said.
Companies like Decathlon have strengthened their data governance efforts by implementing a global governance structure and prioritising data security through encryption and advanced technology investments. Sankar Chatterjee, CEO of Decathlon, noted that the company has adopted a zero-tolerance policy toward data breaches and focuses heavily on customer safety.
Anil Menon, CIO at Lulu Group India, highlighted the integration of advanced technologies like robotic process automation (RPA) to improve operational efficiency and customer experience. “Our employees need seamless access to crucial information, such as inventory status and product details, ideally through a single device,” Menon said.
Industry experts believe that the future of retail hinges on how well businesses manage and secure their data. In her recent budget speech, Finance Minister Nirmala Sitharaman underscored the importance of proper data governance, outlining the government’s proactive measures to enhance data management through the Digital India mission.
As data collection continues to grow across the retail landscape, effective governance is increasingly seen not just as a regulatory requirement but as a strategic advantage.
