As economic conditions change, retail brands’ reliance on ever-growing customer demand puts these companies at financial and even existential risk. Top-line revenue and active customer growth do not equal profitable growth.
Despite multi-billion dollar valuations for some brands, especially those operating the direct-to-consumer model, the rising costs of meeting shoppers’ high expectations (i.e. free shipping, free returns) along with the escalating cost of goods, fulfillment operations, and delivery costs, create pressure for brands to turn a profit. The ONLY way brands drive profitable growth is by managing variable costs in real-time. This in turn mandates adopting modern data cloud infrastructure including Google Cloud services such as BigQuery.
To unlock the value of data, Google Cloud has partnered with SoundCommerce, a retail data and analytics platform that offers a unique way of connecting marketing, merchandising, and operations data and modeling it within a retail context – all so brands can optimize profitability across the business.
Profitability can be measured per order through short-term metrics like contribution profit or long-term metrics like Customer Lifetime Value (CLV). Often, retailers calculate CLV as a measure of revenue with no consideration for the variable costs of serving that customer, for instance: the costs of marketing, discounting, delivering orders to the doorstep, or post-conversion operational exceptions (e.g. cancellations, returns).
What may first appear to be a high lifetime value customer through revenue-based CLV models, may not be profitable at all. By connecting marketing, merchandising, and operations data together, brands can understand their most profitable programs, channels, and products through the lens of actual customer value – and optimize accordingly.
The journey for brands starts with the awareness and data enablement of a more complex data set containing all variable revenue, cost, and margin inputs. What does a retailer need to do to achieve this?
All data together in one place
Matched and deduplicated disparate data
Data is organized into entities and concepts that business decision makers can understand
A common definition of key business metrics (this is especially important yet challenging for retailers because systems are siloed by the department and common KPIs like contribution profit per order may be defined differently across a company)
Branched outputs for actionability: BI dashboards vs. data activation to improve marginal profit.
Once brands understand these requirements, up next is execution. This responsibility may fall within a ‘build’ strategy on the shoulders of technical IT/data leadership and their team(s) within a brand. This offers maximum control but at maximum cost and time-to-value. Retail data sources are complicated and change often. Technical teams within brands can spend too much time building and maintaining the tactical data ingestion process, which means they are spending less time deriving business value from the data.
But it doesn’t have to be this hard. There are other options in the market that brands can consider, such as a tool like SoundCommerce which provides a library of data connectors, pre-built and customizable date mappings, and outbound data orchestrations all tailor-made and ready-to-go for retail brands.
SoundCommerce empowers retail technology leaders to:
Maintain data ownership to allow users to send modeled data to external data warehouses or layer-on business analytics tools for greater flexibility
Provide universal access to data across the organization so every employee can have access to and participate in a low-code or no-code experience
Expand and democratize data exploration and activation among both technical and non-technical users
For retail business and marketing decision-makers, SoundCommerce makes it easy to:
Calculate individual customer lifetime value through the lens of profitability – not just revenue.
Evaluate and predict lifetime shopper performance – identify which programs drive the highest CLV impact
Set CAC and retention cost thresholds – determine optimal Customer Acquisition Costs (CAC) and retention costs that ensure marketing efforts are profitable through the lens of total lifetime transactions
Below is a sample data flow that illustrates how SoundCommerce connects to all the tools a Retailer is using and ingests the first-party data, agnostic of the platform. SoundCommerce then models and transforms the data within the retail context for brands to take immediate action on the insights they gain from the modeled data.
SoundCommerce built on Google Cloud Platform Services
SoundCommerce selected the Google Cloud Platform and its services to achieve what they set out to do – drive profitability for retailers and brands. SoundCommerce perfected this very need of retailers to centralize and harmonize data, map to business users’ needs to infer key metrics and insights by visualizing the data, or reuse the produced datasets to build upon other use cases specific to retailers. SoundCommerce built a cloud-native solution on Google Cloud leveraging the data cloud platform. Data from various sources are ingested in raw format, parsed, and processed as messages in Cloud Storage buckets using Google Kubernetes Engine (GKE) and stored as individual events in Cloud BigTable. A mapping engine maps the data to proprietary data models stored in BigQuery to store the produced data as datasets. Customers use visualization dashboards in Looker to access the data exposed as materialized views from within BigQuery. In many cases, these views are directly accessible by the customer per their use case.
Power Retail Profitable Growth with Analytics Hub
SoundCommerce adopted BigQuery and the recent release of Analytics Hub – a data exchange that enables BigQuery users to efficiently and securely share data. This feature ensures a more scalable direct access experience for SoundCommerce’s current and future customers. It meets brands where they are in their data maturity by giving them the keys to own their data and control their analytics-driven business outcomes. With this feature, retailers can customize their analysis with additional data they own and manage.
“Retail Brands need flexible data models to make key business decisions in real-time to optimize contribution profit and shopper lifetime value,” said SoundCommerce CEO Eric Best. “GCP and BigQuery with Analytics Hub make it easy for SoundCommerce to land and maintain complex data sets, so brands and retailers can drive profitable shopper experiences with every decision.”
SoundCommerce uses Analytics Hub to increase the pace of innovation by sharing datasets with its customers in real time by using the streaming functionality of BigQuery. Customers subscribe to specific datasets through a data exchange as data is generated from external data sources and published into BigQuery. This leads to a natural flow of data that scales easily to hundreds of exchanges and thousands of listings. From the Customer’s viewpoint, Analytics Hub enables them to search listings and coalesce data from other software vendors to produce richer insights. All of the benefits are an add-on to the BigQuery features such as separation of compute and storage, petabyte-scale serverless data warehouse, and tighter integration with several Google Cloud products.
The below diagram shows a view of SoundCommerce sharing datasets with one of its customers:
A SoundCommerce GCP project that hosts the BigQuery instance contains one or more Source Datasets that are composed into a Shared Dataset for a specific customer. The dataset is wrapped around Materialized views but can include other BigQuery objects such as Tables, Views, Authorized views and datasets, BigQuery ML models, external Tables, etc.
The same SoundCommerce GCP project contains the data exchange that acts as a container regarding the shared datasets. The exchange is made private to securely share the curated dataset relevant to the customer. The shared dataset is published into the data exchange as a private listing. The listing inherits the security permissions that are configured on the exchange.
SoundCommerce shares a direct link to the Exchange to the Customer, which they can add as a Linked dataset into their project in their Google Cloud Organization. The shareable link can be pointed to a private listing. From here on, the dataset is visible in the Customer project like any other dataset and immediately available to accept queries and return results. Alternatively, the customer can also view the listing in their own project under Analytics Hub and subscribe to it by adding it as a linked dataset.
SoundCommerce is incrementally onboarding customers to use Analytics Hub for all data sharing use cases. This enables brands to get business insights faster and gain an understanding of their profitable growth quickly. Plus, it gives them the ownership to own their own data and manage it how they see fit for their business. From a technical standpoint, the adoption of Analytics Hub has led to leveraging an inherent capability in BigQuery for data sharing, faster scaling, and reducing operational overhead to onboard customers.
The Built with BigQuery advantage for ISVs
Through Built with BigQuery launched in April as part of the Google Data Cloud Summit, Google is helping tech companies like SoundCommerce build innovative applications on Google’s data cloud with simplified access to technology, helpful and dedicated engineering support, and joint go-to-market programs. Participating companies can:
Get started fast with a Google-funded, pre-configured sandbox.
Accelerate product design and architecture through access to designated experts from the ISV Center of Excellence who can provide insight into key use cases, architectural patterns, and best practices.
Amplify success with joint marketing programs to drive awareness, generate demand, and increase adoption.
BigQuery gives ISVs the advantage of a powerful, highly scalable data warehouse that’s integrated with Google Cloud’s open, secure, sustainable platform. And with a huge partner ecosystem and support for multi-cloud, open source tools, and APIs, Google provides technology companies the portability and extensibility they need to avoid data lock-in.
We thank the many Google Cloud team members including Yemi Falokun in Partner Engineering who contributed to close collaboration with the SoundCommerce team.
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