The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
But though companies selling things like over-the-counter drugs, soft drinks and toys have realized more than $500,000 in annual savings after taking initial steps to improve how they share cross-channel retail data, only a minority have taken such steps, according to a new report from Intermec.
Companies that sell fast-moving consumer goods, like non-prescription drugs, small toys and snacks, have the potential to get more information than ever before that can help them boost sales and cut costs. But most say that can’t process and act on that data and share it effectively with retailers, according to a new report from Intermec, a provider of data-management technology and a part of Honeywell Scanning & Mobility.
“We’ve sensed in the last couple of years that businesses are becoming a lot more challenged in dealing with data,” says Brian Schulte, industry director for Direct Store Delivery at Honeywell Scanning & Mobility, a division of manufacturing conglomerate Honeywell that includes Intermec. Direct Store Delivery, or DSD, involves the delivery by manufacturers and distributors of fast-moving consumer goods directly to retail stores.
The study was based on a recent survey of 350 senior executives at manufacturers and distributors of high-turnover consumer goods in the United States, Mexico, Brazil, the United Kingdom, Spain, Australia and New Zealand.
Overall, the study shows that suppliers and retailers are under constant pressure to figure out which products to stock, in what quantity and at what price, Schulte says. “Retailers are trying to tailor their offerings, especially when in smaller-format stores and in specific neighborhoods with local demographics—it’s challenging to get the right product mix,” he says.
And that’s important, because when retailers can’t sell the merchandise they have on hand they wind up spending unnecessarily on inventory management and shipping, Schulte says.
There is a wealth of data available on which products are most popular where from web sites, mobile sites and apps, store point-of-sale systems, and inventory management systems. Yet many companies seeking to make use of that data fall short in at least two critical areas: staff skilled in using analytics data, and technology systems and devices designed to share such data between suppliers and retailers to better plan product volumes and assortments, Schulte says. Such systems can include the sharing of demand data over the Internet to software applications accessed by corporate inventory and purchasing managers. Other systems employ mobile devices to allow a DSD sales rep to share data with store managers authorized to order new products.
Suppliers that provide such information to retailers, showing them data on hot-selling products, can win more shelf space, Schulte says.
Among the study’s findings:
● The top pressures faced by suppliers and distributors, in descending order of importance, are lower prices, the introduction of new products, competition from retailers’ private-label products, the need to analyze and use consumer data to improve product offerings, and making more frequent deliveries to retailers to refresh product stocks;
● 30% of survey respondents say they have realized, or expect to realize, annual savings of more than $500,000 after taking an initial step of launching a re-engineering process to review the performance of their operations, technologies and systems for gathering, sharing and acting on product and sales data. But only 32% say they have started such a process;
● 60% of suppliers admit the amount of product and sales data they can collect exceeds their capability to process and act upon it to help retailers sell more products at better prices;
● 63% say they believe their business is becoming more complicated, hindering their ability to meet the demands of consumers and retailers;
● 57% say consumers are demanding more information about the sources of products, while 35% say retailers are making similar demands;
● 51% say they still use pen-and-paper processes in at least some DSD operations to manage inventory, 41% say their route sales reps have the tools they need to do their jobs effectively, and 42% say they believe their DSD management systems are good enough to serve future needs.
For a free subscription to B2Bec News, click here.