IRI’s latest whitepaper on Big Data Collaboration calls for FMCG retailers and manufacturers to unify their data and analytics expertise in order to drive brand and category growth
Bracknell, UK – 6 July 2017 – The latest whitepaper from IRI, a provider of big data and predictive analytics, calls for FMCG retailers and manufacturers to put aside their differences and work more closely together on key marketing and operational tactics such as pricing, promotional strategies and assortment. IRI believes the industry should adopt a new standard for Big Data Collaboration (BDC) to redefine the way that data is shared between suppliers and retailers.
The last time retailers and manufacturers worked together with such intensity was to make the grocery supply chain work more efficiently. Faced with mass wastage and inefficiency in the supply chain that was reducing profit margins and leaving shoppers dissatisfied, the grocery industry came together to redefine supply chain management. The result was the Efficient Customer Response (ECR) strategy. Established around15 years ago, ECR aimed to increase the level of service to shoppers and put an end to empty shelves or wasted stock. It defined the sharing of retailer sales and store inventory data with supplier orders, billing and payment data alongside sales promotion data so that it could project customer demand and keep the supply chain in line with that demand. The result gave shoppers cost reductions and an improved shopping experience.
IRI believes that now is the time to return to a focus on collaboration in order to optimize the power of data intelligence, improve practices and process and reduce the cost of marketing, driving profit growth for both retailers and suppliers.
“In a struggling retail environment with no growth in Western economies, retailers and manufacturers need to change drastically the way they operate or they will have a hard time to continue investing in innovations, driving consumers into their stores and generating sales with the right level of margin,” said José Carlos González-Hurtado, President of International, IRI. “Instead of battling over price, they need to focus on the relatively untapped commercial advantage which they share: customer knowledge.”
Retailers own the direct relationship with the customer and so have the best real-time understanding of shopper habits but hey lack the fine detail about how customers feel about brands and how important those brand are to the people that shop in their stores. Manufacturers have an extensive knowledge of brands and categories having spent years building strategic, analytical and consumer-centric organizations, but they have little evidence of what happens to products once on store shelves. Combining all of this information with knowledge on media and other external factors such as the macro economy, weather and petrol purchasing, would make it possible for both retailers and manufacturers to personalize the product offer and communications according to the customer in a way that will truly resonate.
“Creating a system or standard for the way that information is shared is the first step,” claimed González-Hurtado. “It would help overcome the barriers of data ownership, the sheer volume of data available and the data analytics skills required to mine it, as well as differing views of the customer. There is also the natural mistrust that exists from fraught partnership negotiations and, of course, the fact that separate businesses do tend to focus on their own goals.”
Big Data Collaboration (BDC) is articulated around three components: data, analytics (modelling) and technology that makes it possible to deliver insight on what really matters to the customer.
IRI’s whitepaper provides guidance for retailers and manufacturers on how to break out of their silos and achieve a customer-focused big data collaboration strategy that is transparent, measurable and speaks the same customer language. It also gives guidance on overcoming the barriers of adapting a collaborative approach. The whitepaper references case studies of supplier and retailer collaboration with UK retailers M&S and McColl’s,
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help FMCG, OTC health care, retailers and media companies to grow. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand cloud-based technology platform, IRI guides over 5,000 clients globally in their quests to remain relentlessly relevant, capture market share, connect with consumers and deliver growth. www.IRIworldwide.com. Follow IRI on Twitter.
For further information please contact:
Teresa Horscroft, Consultant
Tel: +44 (0)1420 564346
Mob: +44 (0)7990 520390