In this article, learn about:
The risks of using Excel for retail analytics
The benefits of Excel
Alternative retail analytics solutions
Microsoft Excel has long been a go-to tool for businesses and individuals managing data. With an estimated billion users worldwide, it’s no wonder Excel is often the default choice for retail analytics. However, relying on Excel for critical business functions comes with risks, especially in the fast-paced world of retail. In this article, we’ll explore the pitfalls of using Excel spreadsheets in retail analytics and highlight alternatives to take your business to the next level.
Risks of Using Excel
Excel is a powerful tool, but not a standalone solution for retail analytics. There are several reasons to be wary of relying on Excel for storing and managing your data:
Data Vulnerability
Excel files are often shared across teams via email or cloud storage without adequate encryption, making them vulnerable to cyberattacks. Sensitive business data stored in these files can also be accidentally exposed to unauthorized users, leading to potential data leaks.
For example, in 2017, a Boeing employee compromised the private data of 36,000 Boeing employees by accidentally attaching an Excel file to an email. This type of mishap highlights how easily sensitive information can be exposed.
Prone to Human Error
Unless you’re importing every bit of your data and reviewing every input, there’s a high likelihood of errors or improperly formatted entries. These small mistakes can snowball into significant problems, such as inaccurate forecasts, incorrect orders, or delayed shipments—all of which can cost time and money.
The "London Whale" incident in 2012, where JPMorgan Chase lost over $6 billion, highlights how Excel's error-prone nature can lead to catastrophic consequences. A copy-and-paste mistake within an Excel spreadsheet distorted a risk model, leading to big financial losses. This underscores how even minor spreadsheet errors can cascade into significant financial and operational setbacks.
Lack of Scalability
Having rows and rows of data to comb through won't help you mine for quality insights. Excel is still fairly one-dimensional in comparison to data dashboards, leading to a lack of visibility. No modern business should solely rely on Excel to organize and understand their retail data. As datasets grow, Excel becomes cumbersome and inefficient, unable to handle large-scale data operations effectively.
Collaboration Limitations
While Excel offers some collaborative features like shared cloud files, user presence indicators, and change tracking, issues can still arise. Multiple users working on the same file can still encounter version conflicts, accidental overwrites, and limitations in tracking complex edits. These challenges can lead to confusion and inaccuracies in the data.
Limited Automation
Automation should be a fully realized option for your data workflows. While Excel provides the ability to model hypothetical situations and hundreds of formulas for calculations, it relies heavily on manual entry. Tedious tasks, like updating multiple reports or scanning for trends, can slow down growing businesses. Without built-in automation for data integration and analysis, Excel becomes a bottleneck rather than a solution.
Pros of Using Excel
Excel wouldn’t be such a beloved tool if there weren’t benefits to using it. Here are some of its strengths:
Accessibility: The corporate world is very familiar with Excel, making it very easy to adopt across teams.
Cost-Effective: Excel is relatively inexpensive compared to buying analytic software, making it a frequent choice for small businesses or start-ups.
Flexibility: Excel has many functions, making it multifaceted for business needs like budgeting, data visualization, and reporting.
Customizability: With advanced Excel knowledge, users have the ability to create macros to automate some tasks.
Alternatives to Excel
Excel isn’t going away anytime soon. But, that doesn’t mean you can’t search for a better solution to bring to your organization. SPS Analytics provides suppliers with powerful insight into their supply chain and sales performance through industry-leading dashboards. SPS Analytics takes your complex data and consolidates, validates, cleans, and organizes it, so you can:
Plan Effectively: gain comprehensive demand visibility for effective inventory and sales planning.
Make Better Decisions: receive actionable data insights to drive informed decision-making.
Manage Inventory: access real-time inventory management across multiple channels and retailers.
Collaborate with Confidence: enjoy seamless collaboration and data-sharing to enhance your team’s operational efficiency.
If you need better visibility into where deductions are coming from in your supply chain, SupplyPike offers cutting-edge tools to help you track, manage, and dispute deductions with ease. From automated disputing to intuitive dashboards, SupplyPike ensures you’re equipped to recover revenue and pinpoint the root cause of operational inefficiencies.
Stay Connected with SupplierWiki
Be the first to access free resources like eBooks, cheat sheets, webinars, and articles created specifically for retail suppliers. Our newsletter covers everything you need to know about managing revenue and navigating the supplier landscape for Walmart, Amazon, CVS, Target, Kroger, Lowe’s, and Home Depot. Sign up today or visit our website to learn more!