Aligning a Data Strategy with Business Objectives

In today’s digital landscape, business leaders are bombarded with messages about the power of data—its utility, potential, and capability to propel your brand into the next phase of success. Yet, despite a natural inclination towards taking immediate action, it’s essential for leaders to pause and strategically plan their data journey before diving into development. Think of it as measuring twice and cutting once. 


Enabling your retail partners to meet their objectives and simultaneously achieving your brand’s objectives through strategic data use requires careful consideration of several key factors. Are the business goals of both parties in alignment? Which KPIs accurately reflect these objectives? And how do the data support elements integrate with your team’s processes and analytics capabilities? 


This article explores these crucial aspects, drawing on tangible examples from the retail industry to illustrate each point.




Retailers will have an ever-changing list of strategic objectives they are trying to achieve. Brands need to stay on top of their retailers’ public earnings reports, chatter in business journals, and, most importantly, direct feedback from their merchants. To give this article more context, let’s focus on Walmart and its bet on eCommerce. 

Every earnings report about Walmart typically involves a direct mention of eCommerce sales growth or some indirect investment to support the company’s exploding eCommerce business. As a byproduct of customers migrating to digital properties, the Bentonville-based retail giant is capturing a treasure trove of shopping data. Last but certainly not least, the profit-boosting advertising business will soon be interwoven into every slice of digital inventory Walmart owns.

Knowing this, brands can partner with their merchants to determine where investments, both time and money, will benefit each party’s goals most. Let’s tease out some significant pillars of Walmart’s e-commerce push before setting up KPIs and specific data strategy elements (remember the “measure twice” comment?).

Strategic Push: Hybrid inventory policy


To meet Walmart customers’ needs better, they are pushing brands to participate in a backup drop-ship inventory model for e-commerce sales directly from the brand to the customer. Walmart would still carry its usual in-store assortment, as the drop-ship model would complement its existing strategy.  

For items in high demand or predictable sales patterns, Walmart can stock inventory in its distribution centers to ensure quick delivery. The drop-shipping model can be used for niche or less predictable items, reducing Walmart’s need to hold large volumes of slow-moving stock. This is a significant inventory turnover win for Walmart. Additionally, the hybrid model allows Walmart to scale its offerings. It can quickly adapt to changes in consumer demand without significant upfront investments in inventory.


Strategic Push: Media


To be found on Walmart’s shopping site, brands can pray their organic search volume is off the charts or take matters into their own hands with Walmart Connect, an in-house advertising platform that helps brands reach consumers online and in-store. A few different benefits come with investing in advertising, including but not limited to category share increases, protection from competitors attempting to show their products for your brand search terms, and inventory balancing. Let’s not forget your merchant will likely get looked upon favorably, if not objectively incentivized, to get brands on the PPC train. 

Strategic Push: Online conversion


Two-thirds of the equation involves being in stock and searchable on Walmart’s website. Once a customer has found your product detail page (PDP), the brand must make a convincing argument to convert them. 

In the highly competitive e-commerce landscape, successfully converting browsers into buyers hinges on three critical elements: offering competitive pricing to ensure your products represent tangible value in comparison to competitors, presenting your brand and products through clean, compelling creative design that resonates with and engages your target audience, and amassing a comprehensive bank of positive customer reviews to build trust and credibility. These strategies create a compelling proposition that can significantly influence purchasing decisions, setting the foundation for a successful sales conversion process.





Taking the three strategic pushes outlined above, we can further break those down into measurable KPIs. 


KPI: Hybrid Inventory Policy


The critical point in the inventory discussion revolves around being in stock. The classic way to approach this problem is through the lens of in-stock or out-of-stock percentages. However, there is a slight twist for the eCommerce channel. If a brand handles “backup inventory” via a drop-ship model, the inventory reports from Walmart’s reporting tools may not provide visibility here. A secondary way to measure this piece revolves around owning the online buy box. A market validated approach involves scraping the HTML powering this widget for each item in the assortment daily. This data can be stored in a database and analyzed in the brand’s business intelligence tool to create a “buy box percentage” metric. For each item, what percentage of the days, for a defined period of time, was your product available and ready to ship? When presenting back to your merchant, the brand can couple traditional inventory measures from their P.O.S. reporting plus this added buy box perspective, helping your merchant understand your brand’s investment in long-tail product discovery on Walmart’s website. 


KPI: Media
Retail media has emerged as a pivotal aspect of modern business strategy and is expected to continue its importance in the coming years. Businesses must inform their merchants about their advertising efforts and discuss the expected outcomes of these investments. A key metric for evaluating the effectiveness of these investments is the Return on Ad Spend (ROAS), which assesses the revenue generated from advertising against its ad costs.

Establishing a ROAS target is critical for the brand and its Walmart merchant, aiming to balance scale and efficiency. “Scale” emphasizes the importance of dedicating a sufficient advertising budget to noticeably boost traffic to product pages, particularly for items with ample inventory. “Efficiency” ensures that product detail pages (PDPs) are optimally crafted to convey what customers are considering purchasing, increasing the likelihood of conversion. 


In essence, while it’s vital for businesses to allocate funds to advertising to increase traffic and sales, it’s equally essential for them to present their products clearly and appealingly to efficiently convert site visitors into customers.



KPI: Online Conversion 

The most rational strategy in this scenario is to utilize the conversion rate metric, calculated as the number of conversions divided by page visits. Implementing this metric across your product lineup will highlight the high performers versus the underperformers. By employing this key performance indicator (KPI), you can direct your focus toward product detail pages (PDPs) that require enhancements in content, copy, or customer reviews. This targeted approach helps identify areas needing improvement and optimizes your efforts toward boosting overall performance and customer engagement.




Having delved into Walmart’s strategic objectives and identified the Key Performance Indicators (KPIs) that bring these goals to fruition, the brand is now positioned to develop a comprehensive data blueprint. This blueprint is essential for acquiring, transforming, storing, and analyzing the data points that will inform their strategic decisions. 

At this pivotal moment, the brand faces an important decision regarding its technical infrastructure, which is vital for implementing the plan. Specifically, the brand must evaluate whether it’s more advantageous to build its own custom infrastructure from the ground up, purchase a “do everything for me” solution, or “rent” services and technologies from third-party SaaS providers such as KrunchBox that handle highly nuanced data engineering components of the data blueprint. 

Each option has its own benefits and challenges: building allows for customization and control, buying can be quicker and less resource-intensive, and renting offers flexibility and scalability. This decision will significantly influence the brand’s ability to efficiently gather and utilize data, directly impacting its success in achieving its strategic objectives aligned with Walmart’s benchmarks.



In summary, aligning a data strategy with business objectives, as demonstrated through Walmart’s initiatives in inventory management, advertising, and online conversion, highlights the critical role of strategic planning in retail partnerships. This process demands carefully crafting a data blueprint, which involves identifying key performance indicators (KPIs) and deciding on the best technical infrastructure approach—build, buy, or rent. These decisions are pivotal in harnessing data effectively to support strategic goals, ensuring that brands can navigate the complexities of e-commerce successfully and align with major retail partners like Walmart for mutual growth and success.