If you work in the retail industry, you will have no doubt heard of syndicated data. Also known as market data, it’s crucial to your success. That’s because of what you can achieve with it. From a retailer’s point of view, it allows you to monitor your competition and spot any opportunity gaps. It’s just as useful for you if you’re a supplier.
Why should suppliers know about syndicated data?
If you’ve read any of our previous articles on syndicated data, you’ll know that the most common businesses to purchase and use this data are suppliers and manufacturers. However, that doesn’t fully explain why you, as a supplier, need to know about this data.
Here’s a little more detail: with syndicated data at your fingertips, you’re essentially setting yourself up as the go-to supplier for advice around a product category. Since syndicated data is sourced from multiple retailers within a given segment, you can offer a retailer valuable information.
It thus stands to reason that you can quickly become ineffective if you don’t understand or have access to this data. That’s especially true if you’re attempting to give retailers advice.
Of course, it does depend on whether you are receiving any data back from the retailer with who you are doing business as well as what type of data they are giving you.
Here’s why: there are generally two different data types. There are your category-based data and your supplier-only data.
In the case of the second type, it’s dangerous without the overlay of syndicated or market data since you’re blind to what is happening outside of your category. For you to be genuinely useful and offer valuable advice around your product grouping, you need to have a broad view of the marketplace and how your products fit in.
Let’s say, for example, that you don’t have access to syndicated data or, that you don’t fully understand it. That poses two problems. Firstly, you’ll arrive at a buyer’s meeting unprepared and ill-equipped to negotiate for space for your product, regardless of whether it's for more shelf space or not.
Secondly, if you have market data but don’t understand it fully and what it contains, you could end up giving poor advice. Besides that damaging a retailer’s chances of growing the category, and you selling more of your products, your reputation takes a knock too.
What can suppliers do with syndicated data?
Knowing that you need to understand syndicated data is a step in the right direction. However, as a supplier, that observation takes you only so far. You also need to know what you can achieve with this data.
More importantly, you need to know how you can use it effectively so that you can offer a retailer valuable insight while simultaneously strengthening and growing your own business.
1. You will know which products in your category are strong performers
The first opportunity that syndicated data provides you with is the chance to observe and report on what is happening around the products within your category in-store. In other words, you can discover which products (or sub-groupings of products) are growing or performing well.
If you've taken on the role of category captain, once you know which products, subcategories or segments are selling the most, you can present this information to the retailer. As a side note, the best performers might not be your products, but you still need to submit your findings since your goal is to grow the category.
One way of doing that is by conducting a category analysis and using various data visualisations to indicate how the category performs overall. From there, you can add your suggestions.
Another way is to flush the data into realograms to suggest changes where necessary. In this case, it’s analysed using planogram software.
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Conversely, in knowing which products are strong performers, you’ll also know which aren’t performing as they should. And it’s here where you can show your worth.
Of course, you do need to be aware of the retailer’s overall strategy. If, for example, they are centrally space-planned and don’t make use of category captains, they have the final say in how a category is laid out, and you must abide by that.
If you’re looking for ways to add value with category management, it’s worth reading this piece.
2. You can build a case for your products to get more shelf space
While you always need to consider what’s good for the category, that doesn’t mean that you shouldn’t attempt to negotiate for more space for your products.
Let’s say that after looking at the data you’ve noticed a trend in the market that indicates that the demand for a subgrouping of products is on the rise. The retailer would, quite naturally, want to know this. Once they have this knowledge, they may want to list your product, which is in this segment. They could even look to give the segment and your product, additional space.
As for how you can get to this point, it’s as simple as flushing the syndicated data into the relevant space plan, completing the space planning process and walking into the buyer’s meeting to present your findings. You could also use your conclusions to negotiate for better product placement.
That said, there are a few considerations you must be mindful of when negotiating for more space. If, for example, you’re a small supplier, you need to be aware of the need that your product fulfils within the market as well as the value that you can add.
Likewise, when setting up your presentation to negotiate for more space, you need to overlay both the market data with retailer-specific data. That’s to ensure that your findings are both clear-cut and specific to the retailer. After all, you wouldn’t want to present information to the retailer that they can use in-store.
3. You can build data-driven planograms that benefit the entire category
In a previous piece, we touched on a few reasons why suppliers should be building planograms. You can read that piece here. As part of it, we made mention of the fact that many retailers don’t yet make use of planograms. And that is to your distinct advantage.
The fact that you can use purchased syndicated data to build a planogram gives you an extra edge. By importing it into specialised planogram software with a planogram automation function, and together with the merchandising principles that match the category and products therein, you’ll have a data-driven planogram within minutes.
Just a note of warning: when building your planograms using this market data, you must ensure that it doesn’t replace the retailer’s sales data. Instead, both should work together to give you the best outcome.
Use DotActiv’s planogram automation tool to build data-driven planograms within minutes
It’s also worth pointing out that when you’re thinking about making any changes, you need to think about what is good for the category. If you suggest a change (big or small), is it because you’re seeking to hurt a competitor or want to give yourself an advantage? If yes, you must be careful.
A retailer isn’t only interested in building up and selling more of your product. They’re interested in building the entire category. That said if the numbers indicate that your product deserves more space on the planogram then so be it. After all, it’s difficult if not foolhardy to argue against data-driven decisions.
4. You can broaden your knowledge base
In the retail industry, knowledge is power. The more information you have at your disposal, the better placed you are to understand the marketplace and where you fit. More than that, as a supplier, you’re better positioned to align your products with retailer and customer demand.
The fact that you can do this doesn’t only benefit your bottom line. It’s just as beneficial to any retailer that you approach.
For example, you may uncover a new sub-category that is rapidly gaining market share and present that information to a retailer. When presenting this information, you can also ensure that you’ve placed your brand into this sub-category so that when a retailer looks to introduce it, they’re introducing your product too.
Since you’ve been able to uncover one new sub-category, there is every chance that you can do it again. And when you do, and you present it to the retailer again, you’ll develop a reputation as a supplier who knows how to spot trends and grow categories. Any retailer interested in gaining a competitive edge will notice that too and could even approach you to stock your products.
Also, if that retailer doesn’t have a category captain in place yet, and you’ve shown interest, there is every chance that you could get the role.
DotActiv Lite, Pro, and Enterprise are all different versions of our category management software that allows you to drive category performance.
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 exploratory consultation.