5 reasons why ETLs limit Unified Commerce potential
Introduction
The demand for solutions that automatically centralise and share data across the retail organisation is at an all-time high. ETLs — short for “extract, transform and load” — are data processing platforms that integrate the enterprise’s sales transaction data at a reasonable price and seem tailor-made for the Unified Commerce retailer, particularly those that are also looking for loss prevention functionality.
While their value proposition is compelling, ETLs are often rife with limitations that may put excess pressure on your organisation’s finances, operations and security. In this blog post, we explore the five major limitations of ETLs that make them a poor fit as a Sales Audit solution.
Let’s dive in.
What is an ETL?
An ETL is an integration tool that aids the movement of data from different sources to a central location. In the context of retail, transaction data is automatically extracted from the sales channel, formatted for data analysis, aggregated and then sent to relevant stakeholders across the enterprise.
The need couldn’t be greater than in our current time of rising transaction volumes, sourced from more sales channels, paid for with new payment types, and collected on new and varied devices.
However, with more sales opportunities comes more risk. While retailers have looked to ETLs to keep pace since the 1970s, many fail to account for the complexities of the modern omnichannel enterprise. Here are the five ways ETLs can leave retailers vulnerable.
ETLs struggle with scalability
Transaction data is among the most valuable resources for growing and protecting your organisation. As transactions increase in volume, speed and complexity in step with omnichannel, scalability will only become more important with time.
ETLs are reasonably effective for single-channel enterprises, but they’ve proven brittle for organisations with high-volume integrations, cross-channel transactions and ambition to scale.
Why? Most ETLs are built to serve as middleware for the general market, not a dynamic, omnichannel market like retail. The more data sources — in the retailer’s case, individual shops and sales channels — the harder it is for an ETL to aggregate, process and map data at the pace of the market. And service crashes and performance issues don’t just hold the retailer back; every lag also is an opportunity for bad actors to get away with fraudulent transactions too.
ETLs fall short on data integrity
There’s a gap between what retailers expect of clean data and what many ETLs label as such.
ETLs only audit for data comprehension, not data accuracy and exceptions. In other words, with an ETL, you may be notified if a data field is missing or of duplicate data, but you won’t hear a word if, for example, a specific associate or store is processing voids far above the norm.
Bad data that happens to be complete is still bad data. And sending erroneous or red-flag data through your organisation is dangerous; inventory errors and overlooked theft can lead to punishing costs and compounding issues for your merchandising, finance, operations and loss-prevention teams. Persistent issues can become insurmountable if no one is aware of them.
ETLs are often incompatible with diverse data sources
Consider all the data sources in your enterprise — every store, every channel, every customer.
Many omnichannel retailers see their data sources in the hundreds or thousands, each with its own corresponding type (e.g. transaction data, CRM data), format and purpose. As these data sources feed to your front office and are processed and sent back out to stakeholders, the complexity — and risk of delays and errors — grows exponentially.
The ETL market is currently dominated by legacy proprietary solutions and vendors that are either compatible with only their partner network or force you to manually code integrations.
Retailers are better suited for API-capable, market-native solutions that work as well within a retail technology stack as they do within their own ecosystem. In choosing them, retailers can reap the data integration rewards of ETLs plus gain real-time, compatible and in-demand capabilities.
A Sales Audit solution built for omnichannel is adept at managing diverse data sources at scale while addressing the data and security risks inherent in high-volume organisations.
ETLs require additional investments
As middleware, ETLs are inherently dependent on the data sources and recipients they connect. This leaves retailers with three options:
- Invest in an ETL and hand off data to stakeholders for manual processing
- Invest in an ETL, then invest in another solution with capabilities you need
- Invest in a solution that features data integration as a function of a greater capability
The improved efficiency and low costs associated with ETLs mask the reality that ETLs still make you choose between tedious manual work and higher costs on the back end. For many retailers, option three is the most cost-effective, efficient and capable choice.
Those seeking Sales Audit software are in luck; as it integrates data with the purpose of flagging exceptions, retailers can gain improved data flow, security and visibility from one solution.
ETLs fail to account for security
The core purpose of an ETL is to make your organisation run more efficiently. It achieves this by integrating your data sources to make it easier to pass off aggregated data for additional handling. Its focus is on the speed, not the security, of data.
Unfortunately, ETLs are very good at passing problems downstream but incapable of stopping problems before they have the chance to move downstream. That’s why an increasing number of retailers are seeking solutions that incorporate the data integration and efficiency benefits of an ETL in capabilities like Sales Audit, which flags risky data points as they appear.
The risk of bad transaction data or fraudulent transactions getting lost in the sheer volume and pace of omnichannel retail is high. The costs associated with these oversights are higher.
Conclusion
ETLs are powerful tools built for a time when single-channel transactions were the norm. But for the modern omnichannel retail market, ETLs are limited in scope and security.
Finance and loss prevention departments considering ETLs as a Sales Audit solution may find themselves treating a symptom — data flow — instead of the underlying problem: the rapid and continuous rise of transaction volumes and channel complexity that increase the risk of erroneous and fraudulent inventory and transaction data spreading across your retail enterprise.
Sales Audit solves both.
Want to share your experiences with Sales Audit and ETLs? Click here to take our survey now.
