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On-Shelf Alerting

12/11/2014
Wall Street praises consumer goods companies for generating good profits in an industry known for low margins. Jon Golovin, CEO and Chairman of Retail Solutions Inc. (RSi), discusses how daily alerting, as an integral part of collaboration programs, can help retailers and suppliers achieve better top line sales, bottom line profit and improve customer satisfaction — all win-wins for consumer trading partners and shareholders.

How can consumer goods suppliers and retailers work more collaboratively to meet growth goals? Can you share examples of trading partners that are doing this well?

Golovin:
The most successful data sharing programs are really oriented around collaboration programs, and not just the data. We’re seeing the rise of what we call “Collaborative Business Processes” (CBP) — where trading partners work together to problem solve, make the best use of the data being shared and decide how to make it actionable. Companies, like Ahold and Family Dollar, have embraced the CBP approach taking daily downstream data combined with end-to-end processes and use cases that enable both parties to unlock significantly more value for the retailer, the supplier and the shopper. From goal setting to day-to-day execution, these retailers work with trading partners to identify root causes of out-of-stocks, improve supply chain efficiencies, streamline in-store operations and recapture sales. One retailer who recently implemented alerts is seeing a 1 percent to 2 percent increase in sales, reduces inventory, both in the distribution centers and in the stores, and sees a 25 percent to 55 percent out-of-stock reduction on the shelves.

Out of stocks continue to be a major challenge in the consumer goods industry. How can daily on-shelf availability alerting enable companies to be more accountable and responsive to key stakeholders — customers, partners and shareholders?

Golovin:
Shelf availability is central to the customer experience. There are few more important drivers of shopper satisfaction.  Availability then is an important component in retailer profits and the bottom line. When retailers embrace CBP and not just data sharing, it means they are tying their primary goals for the year to day-to-day execution, and that execution incorporates specific business problems, or use cases, that collaboratively function with the supplier. These use cases then tie into things like annual joint business planning processes, monthly score carding conversations with the supplier community, and also very tactical things like on-shelf availability alerting.  This creates a holistic environment, where retailers and suppliers can achieve their goals, but also set stretch goals, make more progress and be more accountable to stakeholders.


Why is more investment necessary to unlock the insights associated with rich data types that are now available? It’s not enough to just collect big data, so how can it be made actionable?

Golovin:
Given the strategic importance of shelf conditions and improving these conditions, understanding the root cause of out of stocks is a major challenge and business objective. Real-time, accurate data shared across the value chain to create a single version of the truth is needed. From plan-o-gram issues, to forecasting, execution, and erroneous inventory data, it’s important to identify each of those root causes, and correct them both at the shelf as well as systemically throughout the retailer’s organization — on a daily basis. Consumer goods companies must invest in technology solutions, like the RSi data platform, that transforms daily retailer data into actionable insights via applications, proprietary algorithms and use-case templates. Through a variety of tools, including on-shelf alerting, brands can leverage big data and visualize it — making it easy to act, share and report.
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