How Retail Data Sharing Turns Contention into Connection

Insights BlogCollaborationDataInventory
Eric Green
By Eric Green
Nov 11 2014

Since visualization is such an important part of the Big Data toolkit, one can’t help but wonder: What does Big Data actually look like?

An IDC study from 2011 found that 1.8 billion gigabytes of data were created and replicated in that year alone. To put that number in perspective, it would take 57 billion 32-gigabyte iPads to store all that data. Stack them up, and that’s enough devices to build the Great Wall of China… twice!

It’s an interesting image—a highway of sleek black LCD screens, visible from the moon—but it also provides an important metaphor. The top of the Great Wall may make for a very scenic stroll across northern China, but the 13,000-mile structure wasn’t built to help people move from one place to another. It was built to stop them.

Genuine Challenges to Data Sharing

For many companies in the retail industry, and especially for smaller ones who haven’t yet converted their various data streams into real-time insights through advanced retail analytics, Big Data can look more like a barrier than a path. As the information piles up every day, it’s daunting for one company to make use of it, let alone adding the task of passing it around between multiple trade partners.

Though internal information silos can also present significant roadblocks to reaching the end goals of responsive decision-making and more efficient supply chains, the most critical data blockage exists between suppliers and retailers.

CGT and RSI News have released a retail industry study that explains the challenges faced by companies in achieving greater transparency. Titled “The Data Sharing Gulf Expands,” the report shows that large retailers like Walmart and Target are leading the way with extensive retail data sharing, including daily Point-of-Sale (POS) data. But the study also shows that many smaller companies are lagging behind.

It’s no surprise that retailers would hesitate to disclose their proprietary retail data, given the strain that is often placed on the supplier/vendor relationships. For example, suppliers have often found themselves in competition with their retailer partners, who release private label products at lower prices than the branded alternatives. On the other side, omni-channel distribution allows suppliers to reach consumers directly, rather than through the traditional avenues.

While the level of conflict may not reach the levels that it did for ancient China and the Mongols to the north (no swords and arrows yet), the tension is still real.

Turning Barriers into Benefits

These and other factors can undermine collaboration between retailers and suppliers, but the eager push for real-time transparency on the part of the world’s most successful companies shows that the benefits far exceed the risks.

The advantages of retail data sharing for both suppliers and retailers include:

  • Improving on-shelf availability;
  • Lower inventory and safety stock levels;
  • Better demand-forecast accuracy;
  • Improving promotion design, forecasting, and execution;
  • And improving the customer experience, among many others.

Those benefits run both ways. As marketing becomes more responsive to demand through faster downstream data flow, and as supply chains become more efficient, retailers and suppliers will see the difference in their bottom lines. For example, the Boston Consulting Group suggests that retail data sharing can reduce 2-3% of total end-to-end costs in the supply chain.

The other important function of the Great Wall of China was to protect trade along the Silk Road.   Though built as a wall, it became one of the most profitable trade routes in history. For companies that treat retail data as a point of connection rather than a point of contention, shared information can become a pathway to increased efficiency and improved returns.

To find out how retail data sharing combined with a powerful analytics platform can facilitate better retailer/supplier collaboration, try a demo of Askuity’s retail intelligence platform.

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