What is the importance of retail sales data and why should you as a supplier have access to it? For one, it enables you to come up with better ways to provide valuable suggestions to retailers. Secondly, you can help retailers to grow the category that you supply. Of course, it should be common practice for retailers to share their sales data with you.
That’s especially if you want to create better planograms. You’ll struggle to be effective without access to retail sales data. But how do you do that? How do you convince a retailer to give you access?
In retail, there really is no debate about the importance of sales data. That’s because, without effective data analysis and interpretation, raw data does not hold much value. Data needs to be processed, analysed and reported on
As a supplier, retailers can provide you with the sales data of your products or the product category as a whole. The latter is preferred as this will place you in a position to report on the performance of the entire category. It is important to ensure that the retailer understands that you will be using the sales data provided by them to analyse the category and make suggestions based on the findings.
You can use this data to calculate the commission of sales representatives, assess overstocks, identify opportunity gaps per store, initiate new product developments, allow elasticity studies and create data-driven planograms.
The visual presentation of a planogram will substantiate the advice you offer a retailer in terms of gondola flows, merchandising techniques and give a visual representation of what the gondola will look like even before in-store implementation.
Based on the planograms, you can then offer the retailers advice on how a category should be laid out in terms of flow and shelf space allocation, the number of product facings, days of supply and the merchandising strategy.
As mentioned above, without analysis, data is not worth much. Through data analysis, you can compile various reports to draw conclusions on the sales data.
These reports are valuable to a retailer as they can provide them with valuable insight in terms of the best and poor performing products, space allocation, days of supply on a shelf and potential opportunity gaps.
Retailers can then implement changes in terms of the number of product facings, product placement and possibly eliminating poor performers from the product range. These reports can also contribute towards future trend forecasts and allow you to justify why your products should be included in a retailer’s range, receive more shelf space or prime placement on a shelf.
Days of supply will indicate to the retailers how long stock will be available on a shelf before they need to replenish it. This will also benefit you as it will most likely increase your sales.
The increase in supply chain collaboration proves that it provides benefits to all parties involved. Let’s unpack these benefits below.
- More shelf space for your products
As a supplier, the benefit lies in the shelf space of your products and the additional sales to your retail customers as a result of the improved stock management. You can also use retail sales data to gain better positioning on a shelf where this is warranted.
For example, when negotiating for more shelf space, sales data could help you prove why you deserve more shelf space. It could even provide you with the opportunity to supply more products due to missed opportunities. To optimise shelf space allocated to your products, the creation of planograms is a best practice.
- Stronger Retailer-Supplier relationships
The relationship between yourself and your retail client can only strengthen if the planograms you’ve built using data are implemented and result in growth for the category as a whole.
It’s also worth pointing out that you’re likely to supply products to different retailers in the market, so you can compare the market data of these retailers. You can identify opportunity gaps within a retailer and make range suggestions accordingly. This is the type of insight that an individual retail brand does not have access to. It can also further strengthen any relationship, be it newly established or already mature.
For example, Product A sells 15% more if it is placed next to Product B as opposed to Product C. This could be valuable information to a retailer. However, they can only gain this if they share their sales data with you.
- Better insights/decisions through data
Since you generally work with many retailers across different locations, you can develop a reputation as a specialist in knowing which products sell better in different areas. This places you in a prime position to create an effective store or cluster-specific planograms as opposed to generic planograms across all stores.
Data analysis would allow you to suggest a precise order size to a retailer to avoid overstocking of your products resulting in excess stock for them. They might even want to send back that excess stock, which could negatively affect your reputation with them.
The converse is also true. By analysing the retail sales data that they provide you, you can help them to avoid out of stocks and missed sales opportunities.
We have all been to a store for a specific product and then left the store without it to purchase it somewhere else. Again, by analysing sales data, you can help retailers avoid that.
As already mentioned, it’s common practice for retailers to provide you with retail sales data. But what happens if you come across a retailer who doesn’t want to do that? And they don’t listen to any of the above reasons why they should.
Of course, you might not be one of their main suppliers. But that shouldn’t stop you.
While not ideal, you can still create planograms without sales data. You can use these planograms to indicate the product flows and the merchandising principles. You could even leverage this to convince them why you need the data and to indicate to them how you would apply it in their stores.
You can also use these planograms in visual merchandising to ensure that the shelf space is visually appealing to create an appealing store layout.
It’s still worth indicating the benefits, as discussed above, of data sharing.
When you clearly explain any of the above benefits, you should find it that much easier to persuade retailers to provide you with the retail sales data for your category. After all, retailers still have the upper hand in the implementation of the suggestions and collaboration efforts.
It is advisable for retailers to collaborate with their top suppliers from their best performing categories as the outcome is worth the collaborative effort. If you can prove your value to them, regardless of size, you can get access to the necessary data.
Effective supply chain collaboration is not a quick or easy process to get right. But collaboration can prove beneficial to everyone involved.
Conclusion
Data sharing within a supply chain results in benefits and long term improvement for the supplier and the retailer. As a supplier, you can use DotActiv software to integrate sales data and to create data-driven planograms to be shared with your team and retailer clients. You can visit our online store here or click below to find out more.
Looking for advice or need a category management solution that can help your business? Visit our online store here for more information or book a custom and free exploratory consultation.