A recent survey from IBM revealed consumer expectations are at an all-time high. Eighty percent of consumers want the ability to view in-store product availability online. Additionally, 78 percent want retailers to provide details beyond "in stock" or "out of stock."
Numbers like these tell us that data is truly at the core of every shopping experience today. The rise of omnichannel/unified commerce in recent years has also raised data accuracy to the top of executive priority lists. For this reason, it has become clear that data sharing standards — particularly transactional or point-of-sale (POS) data sharing best practices — can help solve a critical retail commerce pain point.
Recently, the GS1 US Apparel and General Merchandise Initiative, which is composed of more than 130 suppliers, distributors, retailers and logistics providers focused on solving supply chain challenges through GS1 Standards, formed a special workgroup dedicated to the topic of POS data sharing. The group is committed to finding optimal ways to analyze transactional data to make effective business decisions for both replenishment and business planning purposes. It is through this data that retailers and suppliers have the opportunity to get ahead of consumer expectations and proactively achieve operational excellence, rather than stay stuck in a reactive state that does not measure up to what consumers demand. This data can serve as the ultimate performance measurement tool — where consumer insights, social data, purchase histories and recommendations can be disseminated and analyzed among trading partners for better collaboration and more informed decision making.
Let's take a look at the group's definition of POS data sharing, the current challenges faced by retailers and suppliers and the specific ways data sharing helps trading partners more effectively tailor their business processes to meet the needs of today's consumers.
POS data sharing business use case
POS data sharing encompasses key transactional data — on on-hand merchandise and sales and on order statistics, as well as markdowns and owned retail. According to a recent study from RIS News and Consumer Goods Technology, retail industry leaders continue to make progress in data sharing efforts, while many mid-sized and smaller suppliers and retailers remain stagnant. The study found that it is more common for retailers to provide suppliers with daily or weekly inventory reports than with daily POS data reports.
Improving POS data sharing can enhance retailer/brand collaboration to clearly establish objectives and targets, define success factors, drive efficiencies and reduce costs. In most cases, insights like these can be key enablers for strategic discussions and decision making.
As data insights become more crucial to securing sales and building customer loyalty, both suppliers and retailers have a vested interest in the quality, format and frequency in which they receive data. Retailers struggle to receive complete product data from suppliers, and suppliers often do not have updated insights from retailers about which items sold and where. Without more defined collaboration, the processes of replenishment and future planning are slowed down significantly, and can lead to data inconsistencies and out-of-stocks, which will frustrate the customer.
Collaborating to share good data can enable more complete inventory visibility and actionable intelligence. For both the retailer and supplier to create a consistent unified shopping experience, they need to work together to ensure the right mix of product is in the right place at the right time. By leveraging the GS1 System of Standards, these trading partners can reduce costs by automating data sharing for critical metrics and collaborate to increase inventory visibility. Through GS1 US guidelines and best practices, retail companies can also ensure a collective and organized way to share information rather than work through individual company requirements for data sharing formats and information exchange. Through the common language of GS1 Standards, retail trading partners can effectively share a single, standardized product data set — minimizing costs and optimizing operations efficiencies for all parties.
Working together for a consistent omnichannel experience
The goal of enhancing POS data sharing in the retail industry is to allow trading partner access to updated and consistent sales and inventory information. Suppliers participating in the GS1 US POS Data Sharing Workgroup pilot have daily access to POS data reports, thereby improving efficiencies by simply being able to track what merchandise was accepted, locate it in store, learn sell-through percentages and monitor out-of-stocks. The key is also to improve alignment between trading partners on which specific metrics should be shared and at what frequency trading partners will be able to access this information. This means an expansion beyond what is shared and defined today through typical electronic data interchange (EDI) systems.
For instance, suppliers can play a more active role in product mix decision making; e.g., changing product mix due to weather changes or using insights to optimize product allotments to higher performing markets. Additionally, the ability to compare e-commerce sales to in-store sales helps retailers and suppliers better understand where product should be allocated and how it should be considered in what is truly "on-hand." What seems to be most important to retailers is that suppliers can help them lower the significant capital investment they have in inventory and safety stock, viewing this as the top benefit of sharing their data, as reported by the RIS News and Consumer Goods Technology study.
The GS1 US Apparel and General Merchandise Initiative continues to look for ways to improve collaboration in this area and is testing pilot programs throughout the remainder of this year to further define the appropriate use cases where GS1 Standards can make POS data sharing more effective and efficient. All organizations exploring their data sharing capabilities should remember to keep the consumer at the core of any decision making process, as anticipating expectations will be the key to survival in our increasingly data-driven retail world.
Melanie Nuce is the vice president, apparel and general merchandise at GS1 US. In her role, she guides the GS1 US Apparel & General Merchandise Initiative by working with industry stakeholders to identify business needs and by developing standards-based approaches to address them.