Dec 03 2013
The other day, my colleague and I were lamenting the fact that one of our younger co-workers could not name a single song by one of the icons of our music generation, Bruce Springsteen. Of course, we then ran through our repertoire of song names that surely he “must” know, one of them being his 1984 hit, “Dancing in the Dark”. He did not know any of them.
And it got me thinking that that title could very well have been an appropriate theme song to my experience as a product vendor selling to large and mid-sized retailers in the U.S. and Canada. We were very much ‘flying blind’ when it came to understanding how our products were faring at shelf-level. Sure, we knew what our shipments into the retailer’s DCs were, but beyond that, we had little visibility into sell-through and inventory levels that could help us sell more and plan better.
A senior executive at a major product distributor related the following anecdote to me that reassured me that this wasn’t unique to my company. They had gained listings for a new product at a large chain drug retailer and were actively planning a successful launch. Shortly after the product hit store shelves (confirmed only by physical inspection at local stores by vendor personnel), the company’s sales manager called into the buyer to check in on performance to date. The answer back was encouraging: after consulting the numbers, the buyer reported that the stores had sold through 30% of the product shipped in the first 2 weeks, a positive start. The retailer seemed happy, so the product distributor was happy. Everything appeared to be on course. Production plans were confirmed, marketing plans were green-lighted.
But three weeks later, that same buyer called the sales manager back to share some dire news: the buyer had mistakenly been looking at the wrong product’s sell through data and the true numbers were not at all positive. In fact, they were terrible – the retailer was now demanding that the distributor take back all of the unsold inventory.
This unfortunate story is the perfect microcosm of the retail visibility challenge: neither the retailer nor the vendor had the information required to make the right business decisions and affect a positive outcome. This lack of meaningful collaboration between the retailer and the vendor reverberated all along the supply chain: promotional plans, production plans, pricing decisions, inventory levels…all were miscalculated based on a lack of common information. In short, the vendor was left on its own, “Dancing in the Dark”.
Unfortunately, this tale is not unusual. In fact, with a few notable exceptions, retailers and their product vendors generally operate in separate silos when it comes to critical store-level information that is the true measure of product and retail health. As a result, each party makes decisions based on their own information – decisions that are interdependent, but all too often completely disconnected. The inevitable result is missed opportunities and suboptimal results like out-of-stocks, wasted marketing dollars, and excess inventories.
Dancing around in the dark is dangerous – you might be able to avoid obstacles or other people for a while, but eventually, you will end up hitting a wall. Gaining real time store-level visibility is critical to success in retail, and there are a number of turn-key solutions that make this now possible. Learn about ours here.