the importance of data cleansing and harmonization

What is Data Cleansing?

Data cleansing is the process of identifying, correcting, and removing inaccurate, incomplete, incorrect, or duplicate data within a dataset to ensure data quality is preserved and enhanced to meet the business needs. It involves making data more accurate, reliable, and structured for optimal analysis, insights, and decision-making.

Data scientists spend about 80% of their time cleaning and preparing data. This means only 20% of their time is used to analyze and create insights from data.

What is Data Harmonization?

Data harmonization is the process of unifying disparate datasets by resolving variations in data formats, definitions, dimensions, and semantics. It allows users to organize data into a uniform, standardized, and complete format, establishing a cohesive data framework for improved decision-making across the organization.

Common Problems With Retailer Data

The rapidly growing volume of data that retailers provide to CPG companies brings risks of errors, misinformation, and missing information. Managing and processing this extensive data over a company's lifespan can be daunting and overwhelming.

The most common problems that data scientists, IT departments, and data and business analysts have to deal with are:

• Inaccurate Data
• Incomplete Data
• Inconsistent Data
• Duplicate Data
• Obsolete Data
• Corrupted Data
• Irrelevant Data
• Missing Data
• Non-standardized Data

The Impact of Bad Retailer Data

Poor POS and inventory data can significantly impact a company's financial health, efficiency, productivity, and credibility. It can have a detrimental effect on various business areas, including sales, marketing, supply chain, finance, and IT.

Where it hurts CPGs:

• Inaccurate Reporting and Analyses
• Incomplete Insights
• False Conclusions
• Faulty Decision-making and Strategies
• Lower Productivity
• Increased Operational Costs
• Reduced Operational Efficiency
• Limited ROI
• Reduced Shopper Satisfaction
• Damaged Brand Reputation and Loyalty
• Reduced Retailer Satisfaction

The Need for Data Cleansing and Data Harmonization

In today's data-driven world, precise, timely, and trustworthy data is crucial for CPG companies aiming to gain a competitive edge and achieve long-term growth and maximum ROI. 

Both processes are essential to enhancing the value and utilization of data, enabling brands and retailers to create more accurate analyses and insights. This facilitates collaborative, and well-informed business decisions across various areas.

The Process of Data Cleansing and Harmonization

Regardless of the type of retail data analytics, the quality of your insights and business strategies will only be as good as the quality of your data.

Here are the crucial steps involved in Data Cleansing and Harmonization:

1. Collect Data
2. Merge Datasets
3. Remove Duplicate and Irrelevant Data
4. Fix Structural Errors
5. Filter Unwanted Outliers
6. Handle Missing Data
7. Standardize
8. Normalize and Harmonize
9. Validate, Verify, and Enrich

The Benefits of Data Cleansing and Harmonization

1. Improved Data Quality/Integrity
2. One Source of Trustworthy Data
3. Reliable Reporting, Analytics, and Insights
4. Quicker, More-informed Decisions
5. Identify Sales/Revenue Opportunities
6. Reveal Cost Savings Areas
7. Reduced Demand Forecasting/Planning Errors
8. Improved Supply Chain Efficiency
9. Improved Consumer Engagement
10. Improved Brand Reputation/Loyalty
11. Improved Trade Promotion Planning, Execution, and Optimization
12. Accurately Measure Marketing Campaigns and New Product Launches
13. Maximize ROI
14. Reduced Data Storage/Processing Loads
15. Enhanced Collaboration
16. Stronger Retailer Relationships
17. Less Time/Money Spent on Data Issues

Come Clean With Retail Velocity

Automated data collection, cleansing, and harmonization of daily POS and inventory data through a cloud-based retail data platform like VELOCITY^® can significantly improve the consistency, accessibility, and usability of your retail data.

By quickly and easily converting faulty, fragmented data into usable information, CPGs can more effectively identify sales opportunities, reduce inventory risks, and detect early disruptions.

Clean, organized data leads to more reliable business intelligence, increased productivity, and lower overall costs of preparing, managing, and analyzing data, allowing brands to spend less time dealing with data and more time growing their business.

For more information on how Retail Velocity can help you automatically collect, cleanse, and harmonize your data from any retail source and in any format, please reach out to us today.