70% of organizations not yet leveraging this retail 'revolution'
There’s been plenty of buzz about big data: the analysis of information that is too large to store on a single computer. MIT’s Sloan Management Review calls big data analytics a “mandate.” Five years ago a McKinsey article referred to big data as “the next frontier for innovation and competition,” and Kroger Chairman David Dillon referred to data analytics as the retailer's “secret weapon.” Big data has been hailed as a revolution, yet 70 percent of organizations are not using big data at all. What gives?
This article was originally published in RIS News magaine.
As the saying goes, "It's not what you know, it's who you know." This is especially true for today's grocery retailers as they push to implement shopper-centric merchandising initiatives.
Let’s say you are going on a big trip. Wouldn’t it be nice to know where you were starting from? It sure would make it easier to draw a map to your destination or to take the first step, for that matter. For many grocers who want to find new ways to leverage their suppliers to help them improve their business, answering that question—Where am I starting?—is harder than you’d think.
In June the National Association of Chain Drug Stores (NACDS) and The Partnering Group (TPG) released a new study focused on helping “retailers and suppliers establish joint business plans to align and optimize shared business goals.” Developed through interviews with senior merchandising executives from major retail and consumer goods companies, the report, titled "Creating Value Together," is definitely worth a read.
Grocers are under siege. The grocery retail segment has changed dramatically in recent years, with capacity growing twice as fast as consumer demand, and shoppers increasingly buying more grocery items at drug, convenience, dollar and mass merchandising chains.Against this backdrop, grocery retailers are struggling to simultaneously achieve two goals.
You wouldn’t think that competition in grocery could get any worse, given it’s already slim margins and cutthroat jockeying for new shoppers and market share gains. But it is. Walmart for example, opened their 4,000 US store last year and added $10 billion in combined sales from 132 new stores– a figure higher than total annual sales for 80% of US grocers.
There are plenty of reasons why retailers continue to fall short of achieving perfect inventory mangement. Today I just want to focus on one barrier to better inventory management:
When asked recently if we really felt that the cloud could help retailers realize the potential of advanced analytics, we were able to answer without hesitation that it will be a game changer.
The Gartner Group’s August 2013 Retail Forecasting and Replenishment Vendor Guide found that retailers’ ability to use demand forecasts still falls way short of the potential value, especially around forecasting demand for new items and promotions.