By Paul Hinds, IRI Managing Director Asia-Pacific
After a prolonged period of stability, the retail data market in Australia is currently going through some major changes, reflective of the global trends impacting our industry.
There are generally two approaches retailers are taking to sharing their data:
- Supplying more granular data to their suppliers more often - sharing the challenge of creating faster, more actionable and measurable insights to drive incremental customer value.
- Controlling and limiting supplier access to data - concerned about suppliers knowing too much about the inner workings of their business and the potential for competitors to access and leverage this data.
An important nuance for retailers who share data lies in their objectives. Retailers who recognise that to differentiate their offering and win customers requires genuine, insight-driven collaboration between themselves and their suppliers are visionaries. These retailers do expect a commercial return on their data sharing but this will not be their driving force. They understand that the long-term commercial benefits of sharing their data will far outweigh the short-term data revenue.
Many retailers do view the goal of commercialising their data as pure incremental revenue. If this is transparent to their supplier base and the cost is not exorbitant, this approach can work; there is still incremental value to be derived from the insights to inform product, pricing, promotional and channel strategies. However, if genuine collaboration is minimal, it will take far longer to have an impact and the ROI will always be questionable.
IRI holds a unique position in the FMCG eco-system. We have relationships with retailers and their suppliers. We generate revenue from data but our value to clients is the insights we provide and the decisions we support and measure. Our independence in the marketplace enables us to act as a true collaboration agent.
So where should you spend your budget on data services?
When I look at the evidence from IRI’s strategic global retailer partnerships, where we work with the majority of the top 20 retailers in both the US and Europe, I believe those willing to collaborate on deriving insights will gain the greatest competitive advantage. By focusing on customer needs, they will truly enjoy a WIN/WIN/WIN (Customer/Supplier/Retailer).
They best way to achieve this is to offer a meaningful joint business planning process where both the retailer and supplier leverage common data sets and agreed KPIs, supported by new, faster, innovative methods of accessing data to generate impactful insights.
This is the winning criteria for data defined as an Investment Opportunity.