Provide Chain Collaboration, a $195B Alternative
Billions of dollars are ripe for the taking. The latest Coresight Research report attributes a four percent increase in sales for those retailers and suppliers using shared sales and inventory data to improve performance. With the U.S. retail sales predicted to top $4.89 trillion in 2020, this equates to a $195 billion opportunity. So, how does a retailer or supplier secure it? Supply chain collaboration using point-of-sale data.
Retailers share sales and inventory data with their suppliers to find sales gaps and opportunities, resulting in increased sales and optimized inventory. I’ve seen this time and again in my years working with retailers and suppliers. A supplier will identify a top-selling item the retailer isn’t selling. They’ll spot untapped inventory stuck in a poor selling region; the list goes on. When this insight is brought to a buyer’s attention, immediate action can influence in-season sales.
Empowering suppliers is good business
Retailers have leaner buying teams, covering more categories and in charge of larger open-to-buy budgets. They simply don’t have the time to sift through sales and inventory data and unearth opportunities. Instead, many are enlisting the help of their supplier community. Suppliers know their products and armed with sales and inventory data; they can monitor performance. The result is insights and recommended changes to assortment, allocation and inventory that provide value to both parties.
One of the most insightful parts of the latest Coresight Research study was the following quote:
“An educated vendor is the best partner.”
Nothing could be truer. Retail intelligence and supply chain collaboration benefits, educates and equips the retailer and supplier to work as a team. Two heads are always better than one.
Download the report to see specific examples of how suppliers found business opportunities in the data. And, they resulted in measurable sales increases.
Supply chain collaboration isn’t one-size-fits-all
Not all retailers share data in the same way or to the same degree. Coresight identified three archetypes of retailers ranging from limited sharing to a full partnership with suppliers. At EDI, we have retailers in each of these categories. More and more retailers are going ‘all in’ and sharing data with 75 percent or more of their suppliers. They fully expect and task suppliers with finding opportunities. Suppliers are eager to do so as it means increased business for both parties.
Even retailers that share data infrequently can start to see results. Like anything in life, you only get out of it what you put into it. The more retailers come to trust their suppliers with data, the more they’ll see these suppliers respond with insights and data-based opportunities.
Trust is Built on Transparency
No one likes to hear bad news, but it’s necessary. Suppliers use shared data to minimize risk and identify underperforming products. One supplier noted that it’s “important to not sugar-coat historical results if they were not favorable. Exploring why the results were not good and the adjustments to be made does more to build credibility. Trying to make the numbers look better than they really are only diminishes trust and credibility.”
Trading partner collaboration is based on trusted partnerships. Without transparent and honest conversations, this can’t happen.
The Coresight report identified three best practices for suppliers, based on the interviews they held with these companies. They include:
- Be transparent about results
- Bring data into the conversation
- Identify new sales and opportunities
Monitoring inventory during the pandemic
In recent months, data sharing has been a lifeline for retailers and suppliers. Together, they are able to monitor e-commerce sales as sales shift from brick-and-mortar. They were able to move inventories from states or regions that were closed to support stores and distribution centers that were reopening. Without shared data and supply chain collaboration, these conversations and quick actions couldn’t have taken place.
Our analytics users have increased how frequently they accessed sales data. Many suppliers and retailers have shared that retail intelligence and supply chain collaboration allowed them to pivot quickly.
In a recent ON>Conversation, Kari Vasbinder, director of planning and analytics at The North Face shared her experience. When COVID-19 began, they saw an immediate uptick in sales on any items related to hiking or camping. They used EDI Here Analytics to identify the styles consumers were looking for and found available inventory in the same or similar products. The company’s sales team worked with their retailers to place these items into online stores or warehouses. This action got sales going again.