The data sharing spectrum (i.e., no data sharing; ad hoc spreadsheets; EDI data sharing; online vendor reporting portals) captures the most common approaches in use today. The effectiveness of these various approaches can be evaluated against three key criteria for generating business value:
If only some vendors have access to their retail-level information, opportunities for business improvement are being missed. Perhaps the process is too labor-intensive for the retailer to accommodate anyone other than the largest vendors. Or perhaps the data-sharing technology deployed has not kept pace with the demand for the data or the size of it. In this case, the retailer is often forced to arbitrarily limit access to the information to a select group of vendors, thereby limiting the impact of their retailer-vendor collaboration strategy. Finally, traditional methods of data sharing generally fail to provide access and visibility to in-store personnel responsible for retail execution.
How does the information provided directly lead to a change in execution or decision-making that improves the business? If the information is too infrequently shared, vendors are challenged to draw conclusions from it and act on it. Alternatively, if the information shared isn't granular enough, important tactical decisions cannot be made. For example, if the retailer is sharing only forecasted demand or aggregated product level sales data through their vendor portal, then store-level challenges and opportunities are hidden and go unaddressed.
Does the data sharing mechanism require significant time, effort and expense on a vendor's part to use? Are vendors spending more time cleaning, organizing, reformatting data than acting on it? This is something that all current methods of information sharing such as EDI feeds and vendor portals suffer from in that vendors are typically left with large tabular reports – often tens of thousands of rows in a spreadsheet – that they then have to manipulate into something useful.
While perhaps the largest CPG vendors have invested in the internal systems to turn these 'data dumps' into real insights, the vast majority of vendors in all retail segments find their salespeople or sales analysts lost in a sea of data. In one memorable exchange with a sales operation analyst for a multi-billion dollar apparel manufacturer responsible for pulling data from one large retailer's vendor portal, she admitted that despite having been through weeklong training for that portal, she still only knew how to run two of the 75 reports that were available through the system.
Towards a Better Solution (The Good)
The data-sharing approaches in use today have in many cases prevented vendors and retailers from maximizing value from these initiatives. Fortunately, the convergence of big data processing, cloud analytics and mobile technology has created a new option for retailers who are keen to realize the benefits of vendor data sharing and collaboration without a custom-developed, overly complex solution.
In the coming years, we expect retailers and vendors to embrace these new solutions and best practices as the foundation for enhanced collaboration that ultimately drives joint business growth and an improved bottom line.
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Eric Green is CEO of Askuity, a big data analytics software platform that connects retailers and product vendors with insight and information for better business results.