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Retailer Portals – A “Goodwill Effort”
Certainly more retailers are starting up their own online, business information portals than we have seen in the past. While they’re intended to be reliable and accurate sources of up-to-date supply chain data for the vendors, they vary greatly in terms of how functional or usable the information they provide ends up being to the vendor. These portals contain everything from canned reports to more elaborate analytic tools. And, while they’re a goodwill effort on behalf of the retailers, they are experiencing low levels of vendor adoption.
Why? Simply because vendors prefer to obtain, view and analyze POS data from a greater breadth of retail customers. After all, many vendors work with dozens or hundreds of retailers. If they have to go online and log into each unique retailer’s portal it’s an inefficient use of time and resources.
While the retailer provides POS data in the form of supply chain intelligence via their own portal, the vendor still has to manually take that information and combine it with sales information from other retailers before they can see how their products are truly performing.
For example, a retailer’s portal shows their sales of an item from the previous week, but the vendor cannot compare this data to other similar retailers and/or locations to see if variances exist, and then determine why sales are high in one instance and lower elsewhere. The vendor can then contact the retailer to proactively discuss the issue. Is product sitting in a back room forgotten? Is the product no longer needed by this location due to season changes, such as a warm autumn? Can the item be merchandised or displayed differently to improve sales? Inventory is low in a region, should new items be shipped to prevent a stock out?
Equipped with more comprehensive information, the vendor can better collaborate with buyers to increase sales. Vendors want and need solutions that give them the ability to consume this supply chain data or intelligence from ALL of their trading partners, and this usually involves using a third-party, on-demand analytic service that allows them to become smarter and more proactive in how they collaborate with their trading partner community.
Portals versus Third Party Analytic Services
For example, let’s compare retailer portals versus third party analytic services. Most of these outsourced services are taking advantage of a Software-as-a-Service (SaaS) or on-demand delivery model to minimize setup time and relieve a vendor’s internal resources of data integration challenges.
For retailers, the service is a cheaper option. With SaaS, the retailer doesn’t have to make a financial investment in a portal solution. Perhaps that’s stating the obvious, but you’d be surprised how many retailers just don’t know that a free option for getting POS data to vendors exists.
Retailers can direct their vendors to a SaaS-based solution and have the confidence that the solution is easily accessible, contains their up-to-date POS information, and will be easy for them to use.
More importantly, it’s going to be a solution that the vendor is more apt to use, because contains timely POS information from a breadth of their retail customers. Vendors can use that data to help their buyer discover what can be done to improve sell through, compared to sales that are taking place on the same product, in the same region, at similar retail locations. SaaS intelligence solutions become very powerful and insightful to both the user and the retailer, as they collaborate to maintain proper inventory levels, and improve vendor scorecard ratings with increased fill rates and on-time deliveries.
Conclusion
Today’s vendors are proactively looking for ways to effectively use their retail customers’ POS data to improve their vendor performance. Clearly for the vendor, while a portal solution may be perceived as inexpensive or even free, in most instances, it’s limited in the overall value it provides in terms of its ability to operate as an analytic tool. Vendors want to be able to manipulate and manage the data as they wish to, as opposed to how it’s presented on the retailer portal. Compared to retailer portals, SaaS intelligence services provide vendors with a more comprehensive view of their supply chain across multiple retail customers, and retailers can provide the same information to vendors at lower cost.
David Verette is responsible for leading SPS Commerce’s initiatives to build and expand the company’s partnerships with retailers, distributors and grocers to advance their supply chain processes. You can reach David Verette and learn more about equipping vendors with POS data for improved performance by contacting SPS Commerce.
By David Verette, Vice President of Partner Sales at SPS Commerce
