Vantage Point: What Digital Photography and Downstream Data Have in Common

By: Dr. Jonathan Golovin, Chairman, CEO and Co-Founder, Retail Solutions

Remember the nineties? It was not that long ago that when you wanted to share a picture of your toddler with her grandparents, you had to take a picture, hope that the shot came out OK, finish the roll of film, get it processed at the local lab, select a picture, put it in an envelope, apply a stamp and trust the mail. Between the moment when the picture was taken and the moment when your parents were looking at it, several weeks could lapse, more than enough time for your child to learn a new trick. Each picture was then added to the family album.

Today, the same process takes no more than minutes: you snap a picture using a digital camera, get instant feedback on the camera screen, upload it to your computer and post it to Flickr. Your parents on the other side of the country can instantly be alerted of a new posting, view the picture on their screen, make comments, forward it to their friends and print it on their home printer (with a level of quality matching yesteryear photo labs), while adding it to their searchable Picasa database. Better yet, you may want to use your HD camera and grandparents are now fortunate enough to see videos of their grandchildren on your YouTube channel the day they are filmed -- not to mention the option for video-calls with the help of Skype and webcams.

The retailer-supplier relationship is undergoing the same transition today.

Ten years ago, if you wanted a picture of what happened in a given store, suppliers had to send merchandisers or sales reps there and relied on the single point in time snapshot -- hoping that it was an accurate representation of normal operations and not an exceptional situation. Alternatively, they had to rely on syndicated data, delivered several weeks after the fact, to obtain a more holistic view of their sales performance, with data coming in the form of static reports such as spreadsheets or databases.

This situation started to change significantly with the emergence of retailer data-sharing programs. With these programs, retailers equipped with POS and often perpetual inventory systems started sharing the data with their business partners. Suppliers could then know the next morning what was happening for every product in every store. 

However, this amount of data was overwhelming. When we moved to digital photography, we had the camera screen and a manual process to let us separate the good shots from the bad ones, and we could easily delete the latter ones. When retailers started to share data for hundreds of SKUs in thousands of stores every day (millions of data points on a daily basis!), manual systems based on reports broke down.

What was still lacking were the infrastructure and tools needed to make the data manageable, usable and more importantly, valuable and actionable -- the parallel business functionality to what picture databases, home printers, Flickr, YouTube and e-mail accounts provided to the world of consumer digital picture and video. The coming decade has started to see these gaps filled as Retail Execution Management becomes the standard practice to help manage the relationship and the data shared between a supplier and retailer. 

Today's tools start with this near-real time flow of downstream data, but more importantly change the way this data is being used, both internally at the supplier and collaboratively with the retailer. Manual, time-consuming data analyses, such as tracking every zero scan at retail stores, have now become automated alerts, with new generation solutions identifying out-of-stocks in the store in real time and sending alerts automatically to either merchandisers visiting those stores, the store itself or a buyer.

Retail Execution Management has enabled automated business processes like these. Downstream data is now available online, in hosted solutions and accessible across the enterprise with a simple web browser -- rather than residing in scattered spreadsheets, often stuck in functional silos. Tailored reports, analyses and applications ensure that each role receives only the data necessary to operate -- without ever compromising the single version of the truth contained in the data.

With Retail Execution Management, every supplier today has the opportunity to leverage the data they receive from their customers to turn it into the right decisions -- from tactical ones such as the fine-tuning of tomorrow's replenishment settings or a fix for a specific out-of-stock situation to more strategic ones such as the design of your next promotion or a new planogram proposal for an upcoming reset at a customer.

 

The promise of Retail Execution Management is immense. Early adopters are already reaping the benefits of their investments across the enterprise and across their major customers -- from demand planning to replenishment and from marketing to field sales. However, like the digital photography revolution, it represents both an opportunity and a threat: it will eventually leave a few players by the side of the road. 

One of the big questions every consumer goods company faces today is: "Is my organization prepared and ready to tackle and exploit the Retail Execution Management opportunity?" The answer to this question carries a large part of tomorrow's competitive advantage.

Let me know your thoughts. You can reach me at [email protected].