How to Create a Data Sharing Program that Stands the Test of Time
By Jonathan Golovin, CEO of Retail Systems Inc.
Data sharing as it exists today between retailer and supplier is not enough. The industry is changing at a rapid pace. Everyone is competing. Players that used to occupy discrete areas of retail are now overlapping and challenging one another for the same set of customers — think Wal-Mart entering the grocery business. Consumer expectations have never been greater — they want, and demand a consistent and unified experience across all channels. Many best-in-class retailers are experimenting with new and innovative ways to share data and address the competitive threat. I like to call this, the next generation of data sharing. It’s where collaboration occurs on a near real-time basis and customer needs are immediately satisfied.
This next generation of data sharing begins and ends with the sharing of daily POS data and requires much collaboration and joint planning and execution in between. By sharing data daily, producers can learn what the consumer really wants, on a near-real-time basis. They can also respond more effectively, ramping up production and distribution of popular items, while cutting back on those that aren’t selling so well. They can rapidly identify out-of-stocks or predict what will go out of stock and minimize their impact. It’s during this process of real-time, daily data sharing and collaboration that retailers and suppliers increase the lifetime value of customers, deliver faster inventory turns in-store and create higher margins through reduced out-of-stocks or finding and correcting pricing and promotional errors.
At its core the next generation of data sharing requires turning data into action. Avoiding the gaps, variances, lags and uncertainties that have historically plagued the retailer/supplier relationship, the next generation of data sharing is rooted in real-time demand signals and not a lagged indicator like previous orders. This new form of data sharing is about tying retailer goals to daily execution and joint business planning based on a single version of the truth — which is predicated on the sharing of data on a daily, not weekly or monthly basis.
So, how do you incorporate the next generation of data sharing into your organization? First, define what data sharing means to the organization: the adoption of end-to-end collaborative processes between retailer and supplier based on a single version of the truth. Then decide on the program parameters: set strategic goals, determine collaborative business processes and agree-on rules to measure ROI and program success. Like with any new initiative, the key to success is having a good support structure and plan behind it. Here’s a step-by-step guide to help get things started.
Step 1: Educate Executives and Create Advocates
Having executive champions is critical to the success of your data sharing program. It’s key to educate the c-suite about how the company can achieve major ROI and stay steps ahead of the competition through the next generation of data sharing. It also puts executives at ease to learn that the new trend in data sharing doesn’t cost millions in overhaul or require a lot of IT resources to implement. In fact, it’s about making better use of the resources you already have. Your data.
Step 2: Identify the Top Business Problems that Need to be Solved
Every organization has its set of problems, both big and small. But to kick off a state-of-the-art data sharing initiative, you must first identify, with your suppliers, the top two to three business problems that must be solved this year. Keep it scoped to challenges that impact the organization as a whole and, once solved, will provide measurable value across the enterprise and help with Step 1.
Step 3: Understand the Data Needed for Each Use Case and the Role of Each Party
Each use case has specific data requirements that need to be shared. For example, reducing out-of-stocks require different data elements than improving promotion allocation or reducing unsaleables. To streamline efficiencies and avoid conflict, define the role of the retailer and the supplier in each specific use case — who will take what action to bring the use case to life. If an out-of-stock condition is predicted early on in a promotion, what is the supplier supposed to do — and what does the retailer do? Does the supplier suggest an order quantity and the retailer send that order for immediate replenishment? Or does the supplier have permission to send a DC order directly? If excess inventory remains at a planogram changeover or for a seasonal item, who can authorize a temporary price reduction? Forward-looking data sharing takes the friction out of the sharing process by automating next steps, ensuring action is taken quickly and efficiently.
Step 4: Bring Suppliers on in a Phased Approach
Cutting-edge data sharing programs are best designed with a small group of key suppliers forming a joint advisory committee to ensure that collaborative business processes can be implemented and scaled by both sides. It’s best that the advisory supplier group conduct pilot programs first — to both hone the processes and demonstrate ROI. With the competitive advantage proven, the program can then be rolled out to the next group of suppliers to find and fix any issues at scale. From there, it can be rolled out as quickly as desired.
Step 5: Replace Feeds/Portals with Advanced Data Sharing that Scales
Once you have all of your plans and support systems in place, nothing is stopping you from making the transition. Most retailers will find that this process can be fairly seamless, with little-to-no disruption to day-to-day operations. In time, daily data sharing will expand to include new data sets i.e., social and hyper-local data served to the in-store workforce and field operators via intra-day alerting on a mobile device. While this scenario is almost a reality, putting in place a progressive data sharing program today will help retailers be prepared for tomorrow.
In the end, the next generation of data sharing is a win/win for everyone. Suppliers optimize their product mixes and avoid excess inventories. Retailers slash out-of-stocks and avoid empty shelves. And, most importantly, shoppers get what they want — a seamless, better shopping experience.
Jon Golovin is the Chairman, CEO and co-founder of Retail Solutions Inc., a Mountain View, California-based company that provides big data analytics and real-time intelligence for the consumer goods industry.
Big moves continue at Big Lots
David Campisi joined Big Lots a little more than a year ago as president and CEO and with sales and profits gathering momentum the nation’s leading off-price retailer has decided to begin paying a hefty dividend.
The operator of roughly 1,500 stores nationwide said it would begin paying a quarterly dividend of 17 cents a share as part of a more balanced approach to returning cash to shareholders and as a reflection of confidence in the company’s strategy and favorable long-term prospects.
“We’ve made significant improvements to our merchandise product offerings, marketing activities, and we are implementing several key strategic initiatives intended to improve comparable store sales and the overall shopping experience for Jennifer,” Campisi said in reference to the hypothetical woman the company uses to describe its core customer. He added that the decision to pay a dividend, “demonstrates the confidence we have as a board of directors in our management team, our strategy, and our long term opportunities to drive meaningful profit growth and cash flow to return to our shareholders.”
Prior to the dividend, the company was focused exclusively on buying back stock as a means to return cash to shareholders and in recent years it had spent close to $2 billion to buy back 74 million shares. However, some shareholders prefer the more direct method of an actual cash payout.
“After careful deliberation and considering feedback obtained from investors as part of our shareholder outreach program, we will begin to institute a more balanced approach of returning cash to shareholders by introducing a regular quarterly dividend to supplement this year’s and anticipated future share repurchase activity,” Campisi said. “We are confident the dividend program we announced today along with our recently completed $125 million share repurchase program fit comfortably within our expected cash flow for 2014."
Announcement of the dividend preceded a meeting the company held for investors on June 26 and follows the May 30 release of first quarter results which show Campisi and his new senior leadership team have room for improvement. Same store sales increased 0.9% and total sales increased 1.1% to nearly $1.3 billion during the first quarter. Net income from continuing operations, which doesn’t include a $25.2 million loss related to the company’s exit from Canada, fell to $28.6 million, or 50 cents a share, from $37 million, or 70 cents a share. The earnings per share performance was better than an initial forecast of 40 cents to 45 cents, but the earnings beat was driven by aggressive share repurchase activity. Big Lots said it spent $82.5 million during the first quarter to acquire 2.2 million of its own shares which equates to approximately 3.8% of the outstanding shares.
Campisi, the fomer CEO of Sports Authority, arrived at Big Lots in April of 2013 and since then created a new senior leadership team. Richard Chene was named chief merchandising officer last November, filling a position that had been vacated by John Martin who left the company in July 2013. The month before Chene was hired, Andrew Stein was named SVP and chief customer officer to oversee marketing. Then in December of last year Big Lots named Trey Johnson, Martha Withers and Lucy Cindric to new roles as SVP/GMMs to oversee food and consumables, furniture and home décor and seasonal, toys and electronics, respectively.
Salesforce.com releases retail CRM tool
San Francisco – Salesforce.com has released Salesforce1 for Retail. Retailers can now leverage Mobile Clienteling and Salesforce Communities for Retail to help build one-to-one relationships with shoppers anytime, anywhere and on any device.
Mobile Clienteling will provide sales associates with a 360-degree view of customers, including their location, purchase history, shopping preferences, social profile, browsing history and personal information such as anniversary dates and birthdays. Now retailers will be able to create 1:1 relationships with their customers and deliver an amazing shopping experience across every channel. With Mobile Clienteling, store associates will be able to:
Salesforce Communities for Retail enables retailers to create custom social and mobile communities that enable customers, partners and employees to connect with their brand and collaborate with one another. Shoppers will be able to connect with a brand and each other to find answers to their questions, get personalized product recommendations and access a retailer’s latest promotions, all from their mobile device.
Meanwhile, a retailer’s network of merchants, distributors and suppliers will have instant access to inventory data, a knowledge base of articles and the ability to collaborate with one another. Retail employees will have a single platform where they can collaborate with one another from any location.
In addition, Capgemini and PwC are leveraging the Salesforce1 Platform to build new retail solutions. Capgemini ClientAssist helps store associates upsell and deliver a better and more intimate level of customer service, while PwC’s Total Retail Clienteling provides an integrated and personalized customer experience across store, social and mobile channels.