Think of the last purchase you made. That single transaction involved processing an order number, product code, price, and location, date, and time of sale. If you used a credit or debit card — as 91% of consumers do — then a cardholder name, account number, and other sensitive personal information were also stored, all in a few quick swipes.  

Today’s retailers realize the potential of data to identify market trends, streamline operations, and grow in a hyper-competitive industry. However, the rush to leverage data is counterbalanced by hundreds of InfoSec and privacy regulations. There’s also a rising concern about how organizations are using and potentially misusing consumer data. 

If retail companies want to process data in a way that drives profit and protects customers, they need proper data governance management. 

What is data governance in retail?

Data governance in retail establishes a set of policies and procedures for the collection, use, storage, and ultimately, the deletion of data. Its goal is to unlock the business value of data, while also upholding its commitment to privacy, security, and integrity.

In the realm of retail, data governance offers an additional advantage. Besides its role in regulatory compliance, data governance can help further identify business opportunities. Retailers with high-quality data are able to draw deeper insights and make better decisions across key areas of operations, from forecasting sales demand, to streamlining the supply chain. 

Read our guide on the six questions to ask when building a data governance program.

What are the challenges in managing retail data?

The primary challenge in managing retail data is the complex nature of the business itself. Inventory is shipped from multiple suppliers, products are sold across different locations, and customers buy according to their individual preferences.  

Take all these transactions, multiply them by all the different types of data, and it’s easy to see how managing retail data presents its fair share of challenges. 

Managing multiple channels and systems

A common concept in business is to “meet customers where they are." In retail, this is evidenced through omnichannel sales: POS terminals, online payment tools, mobile apps, social media platforms, and more. The challenge lies in efficiently managing all these channels and dispersed data. 

Without the right integrations, data remains trapped in separate silos and can cause misunderstandings in customer shipments, inventory levels, and actual sales. Data governance programs help organize this data, allowing key stakeholders to gain a holistic view of the overall business. 

Handling large volumes of data

Every day, a breadth of data flows through retail companies. In addition to the standard operational information, such as product inventory, shipments, and monthly sales, a significant amount of sensitive customer data is collected. 

This includes:

• Personally identifiable information (PII): name, address, contact number, date of birth, etc. 
  
  
• Payment account and financial data
  
  
• Shopping history, preferences, loyalty program information

While it’s important to know your customer, retailers need to make sure they are acting within the guidelines of effective data governance and compliance.

 
Protecting against cyberthreats 

Data breaches are a potential risk in any industry, but retailers face an even greater challenge due to the sensitive customer data that’s collected during every transaction. 

Ecommerce and omnichannel sales have further broadened the potential attack surface, positioning retailers as prime targets for data breaches, hacks, and cyberattacks. This makes it even more critical for companies to prioritize robust security measures that demonstrate their ability to safeguard customer data.

4 data governance use cases in retail

Data governance has clear and impactful benefits for retail companies. Here are three common examples that dive deeper into those use cases. 

1. Greater consumer trust 

A McKinsey & Company survey revealed that only 18% of consumers trust retail companies. (For comparison, the highest score was 44% for both healthcare and financial services.) 

But how do you increase consumer trust? According to survey respondents, it starts with a thoughtful approach to data management and a fast response to any breaches or hacks. 

As the relationship between consumer trust and data governance strengthens, it’s clear that retailers focused on governance will gain a competitive advantage in the long run. 

2. Cloud migration and data warehousing

As the retail landscape expands into more online and mobile experiences, organizations are migrating most, if not all, of their data and processes to the cloud. Data governance keeps all this information classified and cataloged so retailers can ensure sensitive data is managed across its entire lifecycle.

Furthermore, as cloud technologies continue to accelerate transfers and access to information, a data governance program can set up the proper safeguards to protect data at every location.

3. Data minimization 

Retail companies accumulate massive amounts of data over time, and not all of it is essential. Unused data, even if it doesn’t affect anything, only adds to overhead cost and risk exposure. 

Data minimization proactively limits the collecting and processing of data to what’s needed for a specific purpose. By deleting any redundant, obsolete, and trivial (ROT) data across systems, retailers are able to significantly minimize their total attack surface and provide teams with the most accurate data to make sound business decisions. 

4. Account data in out-of-scope areas

If your organization accepts debit or credit card payments, you need to comply with the Payment Card Industry Data Security Standard (PCI DSS). Established as the global security standard to protect account data, PCI DSS only applies to areas the retailer defines as part of its cardholder data environment (CDE). 

For this reason, many retailers limit the people, processes, and technology that “touch” account data in order to reduce their scope of compliance. 

By setting internal standards and policies, data governance keeps account data in the right place and retailers within the scope of PCI DSS compliance. 

Do you have a data governance solution in place?

With the high volume and sensitivity of data that runs through a retail company, governance is not just a good practice — it’s a necessity. Prioritizing accurate data management across inventory levels, customer sales, and more will help retailers make the strategic decisions needed to drive growth and profitability. 

Ultimately, a data governance program shows a clear commitment to privacy and security, helping achieve regulatory compliance and building consumer trust in the long run. 

Forward-thinking companies want to make the most of data to become insight-driven, trusted organizations. A strong data governance strategy means that businesses have good data and that they are also smart consumers of this data. This requires a holistic approach to data policies, data quality, risk management, and business processes to create data literacy. The more data literate your organization is, the better you can use data-led insights to improve your operations and provide customers with the services and experiences they want.

Learn more about OneTrust Data Discovery tools and Data Governance by requesting a demo.