“We feel suppliers and wholesalers could be getting so much more value from sales-out data,” said Tanya Pepin, a partner and director at The Wholesale Company, speaking at the Wholesale 2016 conference organised by grocery think-tank IGD in London last month.
“The dilemma is that everyone has access to sales-out data, but very few are using it regularly.”
The Wholesale Company specialises in insight and data services management for suppliers and wholesalers and was set up after its founders recognised the need for “good quality sales-out information”.
“This would mean that wholesalers and suppliers could make day-to-day decisions on what was actually selling out of a depot rather than what a wholesaler was buying in,” said Pepin, who formerly worked for Landmark Wholesale.
‘Lack of time and resources’
The main obstacle to greater use of this data is down to “lack of time and resources to really and truly dig into the information to get real and proper value from it”, she said. This risks losing the potential benefits that sales-out data has to offer, she added.
“Cultural and technological change,” is needed to transform this situation, said Pepin. “Wholesale needs a culture where reviewing sales-out is an absolute norm,” she added. “However, this does necessitate a fundamental belief that selling in huge volumes is absolutely pointless if we are not then tracking together how much of it is selling through.”
Technology is also required that allows players to act quickly and in real-time, she added.
“We are transitioning into a new era now. I think we are moving from business intelligence to operational intelligence,” said Pepin. “Our sector works too quickly to wait for data.” Key to this is that information needs to be available in simple formats, she added.
“Today there are probably very few suppliers or wholesalers that are actually using sales-out on a day-to-day basis. I find it incredible that even now the de facto measure of success is not necessarily what is selling out of the depot.”
This begged the question of how ‘big data’ became so prevalent and yet “so underused” these days, she added. “In my opinion, the primary driver, initially, for sales-out data is the incremental revenue stream that it offers to wholesalers in a channel that is pretty flat year-on-year and where day-to-day trading is incredibly tough.”
But there are now far more opportunities to make money out of this information than merely the incremental revenues it offered, said Pepin.
Reaping benefits of data
“There are now many wholesalers that have reaped the business development opportunities that data presents,” she said. “So, while revenue is important, business development and mutual relationships have certainly been a by-product of it.”
At the same time suppliers are starting to buy the data that wholesalers hold.
“However, for every supplier that bought it because they felt they must, there was a notable group that bought data because they did understand the benefits,” she added. “Furthermore, suppliers already had experience of data from dealing with the retail multiples, where it is ingrained in the day-to-day trading relationship.”
Effective analysis of good quality data offers a number of benefits, such as: in better forecasting; spotting new opportunities; putting sales – that might be speeding up or slowing down – into context; focusing hard-pressed resources for the best returns; and increased revenue, by reducing costs and increasing sales, she said.
“This increased revenue can be far, far greater than the cost of the data.”