Jun 10 2014
In the realm of big data analytics, Business Intelligence experts are calling for retailers and vendors to work together and share more data. While some may get bogged down weighing the pros and cons, one group isn’t stuck in the debate: the consumer. They know what they want, and they aren’t waiting. And to deliver what consumers want, retailer vendor collaboration has become a business imperative.
The Theory of Togetherness
Sometimes a good idea is just that: an idea.
It’s a good idea to exercise, for example, but until you associate exercising with a particular feeling that you enjoy, a health problem you want to fix, or any other personal, meaningful incentive, there’s a good chance your gym plans will remain theoretical.
Many Business Intelligence experts are recommending that vendors and retailers collaborate more, which is the sort of upbeat advice that’s easy to forget. “Sure, I’ll keep that in mind,” you might say to yourself, while promptly brushing it aside, along with all the other positive-sounding suggestions that flood the Internet in a hundred different variations every day.
In the age of big data analytics, however, retailer vendor collaboration isn’t just a good idea: it’s a necessity.
Don’t Just Get Along
“Symbiosis: a close and usually obligatory association of two organisms of different species that live together, often to their mutual benefit.”
Retailers and vendors are already well acquainted with their interdependence. They know they need each other for all the obvious reasons, but even though they recognize their mutual reliance, that doesn’t mean the relationship is one of mutual satisfaction.
As with any relationship, the most important factor is communication. Vendors and retailers are often unsure how much information to share with each other. Recent headlining data breaches have underscored the ongoing importance of security, but beyond the technical side of information safety, there are practical concerns.
– Trust: Retailers may hesitate to share propriety pricing or promotional information.
– Value: Antiquated platforms like spreadsheets, EDI, and even vendor portals make data sharing burdensome.
These issues can cast a shadow on retailer vendor collaboration, but that’s all they do: make things darker. Threats always loom larger in theory, but practical, real-time visibility on customer behavior and supply-chain processes can shine a much-needed light.
Businesses stuck weighing the pros and cons of collaboration will miss out on one essential point: collaboration is a requirement, not an option. There are three reasons why retailers and vendors need to search for symbiosis.
1) It’s available.
Before the advent of big data analytics, protecting proprietary information made more sense. Now that all-encompassing data awareness has been made possible and easily accessible through cloud-based services, failing to embrace transparency along the CPG supply chain would be tantamount to regression.
When end-to-end collaboration represented a profound investment, companies could afford to refrain. Now they can’t afford not to. With the mainstreaming of advanced analytics over the last few years, businesses that automatically share visibility can expect to:
- Bring products to market faster
- Reduce logistics costs
- Increase sales.
2) It’s inevitable.
As we described in “Big Data Analytics: The Foundation of a Retail Revolution,” big data has added a whole new dimension to retail execution, which has implications for every level of business. It’s a genuine paradigm-shift, and retailers and vendors need the kind of flexibility offered by systemic cooperation to shift with it.
Companies that embrace cloud-based Business Intelligence platforms are already enjoying streamlined operations, reduced fees, and competitive assortment planning. These kinds of capabilities require active symbiotic relationships of mutual trust between retailers and vendors.
3) Customers demand it
“’Power has shifted to the customer.’ This has become one of the most overused retail phrases in 2014. It is also, perhaps, one of the most accurate.” – Retail Technology Study, Jeff Foster
Empowered by mobile technology and online feedback forums, customers are researching their purchases more carefully. As a result, they are insisting on better assortments: timely, responsive, and channel specific.
Businesses that want to meet their customers on these terms must provide opportunities — such as custom promotions and diverse fulfillment options — that place an increasingly complex burden on supply chain processes. That’s a burden that can’t be lifted from one side or other: both parties must share the load.
As far as consumers are concerned, the bar has already been raised. Vendors and retailers can no longer reach it separately; both need to create seamless omnichannel experiences for customers, and that depends on the kind of accurate forecasting that only big data-enabled analytics can accomplish.
For more information on how to meet consumer demand through information transparency, download our White Paper, Data Sharing – The Ugly, The Bad & The Good.