Sarah Pittock, Head of Supplier Collaboration Gateways, IRI UK
In the FMCG sector, the relationship between retailers and suppliers is crucial for success and improved customer satisfaction. A win-win for all concerned. Technology has been a driving force for accelerated collaboration opportunities between retailers and suppliers. With an improved and shared understanding of consumer needs, as well as the ability to anticipate future needs, there’s an increased chance that, not only will your shoppers become repeat customers, but both retailer and supplier will be on the front foot to drive brand and category penetration.
Business success this year will not be about being ready to go back to how things were. It will be about anticipating change and understanding opportunities. While it's no surprise that the pandemic has caused the British economy to shrink, the Bank of England is predicting a rapid bounce back by Q4 this year.
Of course, it can't come quickly enough. But for those in retail, navigating the recovery won't necessarily be straightforward because as we know, consumer behaviours are changing at a faster rate than ever before.
Fortunately, the acceleration of digital activity, tech and big data present the opportunity to understand shoppers' changing needs almost as fast as they're happening.
Big data technology opens doors to new possibilities
Retailers are well placed from a data perspective. The scope and richness of the data they have is envied by many. Every day, millions of transactions are processed by retailers. Inherently embedded within the transaction is a valuable collection of information including, but not limited to, individual brands, rest of basket, price, place of purchase and time of purchase. Layered on top is the loyalty card data, and that’s before we even think about enhancing it with contextual data or social media check-ins.
Long gone are the days of using month-old, SKU-level named account data alone to derive insight into consumer shopping trends or passive insights from loyalty schemes. Followed by a retailer-supplier meeting, in which the first 20 minutes are spent debating the numbers because neither party can recognise the origin of the reporting.
Moving forward, big data technology is opening up new possibilities for more sophisticated, faster, and more granular insights from wider data sets. This transformational, tech-driven way of working allows both retailers and suppliers to drill down into more specific insights, including real-time access to store and supply chain-level data as it changes, hourly updates if needed, and regional support to assist with local decisions for local markets.
How Morrisons is putting big data into practice
An example of this approach in retail comes from Morrisons. The UK supermarket needed granular customer insight to deliver its 2021 major range reset, which Morrisons group commercial director Andy Atkinson, described as looking to “make shopping simpler and provide more value for money”.
To do that, Morrisons partnered with IRI to review more than 170 categories of product, making sure it had the right goods on the shelves for its customers and creating a better overall shopping experience. The strategy ensures all products in its range are easy to open, replenish, recycle, shop, and identify, and will lead to the launch of new products, not just a range rationalisation.
The process involved reviewing vast amounts of data, from PoS insights, loyalty data and supply chain information, which would previously have been a laborious, manual cross-referencing process. By using IRI’s big data platform and the inherent AI and machine learning algorithms, Morrisons was able to quickly derive intelligent insights and recommendations and prioritise actions across business areas.
Supporting supplier relationships
Morrisons also wanted to ensure that its suppliers were up to speed. A significant aspect was making sure that suppliers also had access to crucial data, enabling them to view and plan accordingly for any product range changes. A similar approach has been taken by Co-op. The convenience retailer partners with IRI to allows suppliers access to not only customer loyalty and transaction information but also assortment analytics, giving it the ability to input into major ranging decisions. Using tools built into the technology solution, such as Customer Decision Trees to understand how shoppers make decisions in the category, can help suppliers to understand gaps in the portfolio. Dendrograms run within seconds in the technology platform, enabling suppliers to identify interchangeable products based on Co-op shopper need states. These granular insights can power a more productive and collaborative relationship between retailer and supplier.
Cross country advantage
Across Co-op alone, there are 2,500 stores in the UK and a further 2,500 Nisa stores that are individually owned but sit under the wholesale subsidiary. As a local retailer, being able to tailor its offering to the needs of the local community is so important. Being able to get down to a granular level, and shape ranges delivered at unique Co-op category store clusters, has the potential to change the game allowing insight to inform decisions that are best for the shopper.
Big data technology needs to be at the forefront of future retail decisions. By using the technology available, businesses are able to pinpoint opportunities, and move with pace and agility. Additionally, the unity across the supply chain allows businesses to make shopper-focused decisions which, in turn, create better customer service.
Want to find out more about how IRI can help you make the most of data and technology to support your relationships with suppliers and your retail partners?
Get in touch today