Today, most retailers and suppliers are engaging in some level of data sharing to improve their sales and supply chain planning processes. However, many are struggling to make effective and efficient use of the data, according to the RELEX Solutions 2023 Supply Chain Collaboration Report.
RELEX Solutions, provider of unified supply chain and retail planning solutions, conducted a survey of 283 retailers operating in the United States, Europe, and South America over the course of 2022. The study aimed to understand how and why retailers collaborate with their suppliers and the challenges in their existing collaboration efforts.
Suppliers and their retail customers have long struggled to develop effective collaborative processes. In recent years, efforts to connect suppliers and retailers have taken a back seat to crisis management as they continue to face supply disruptions and increasingly volatile market shifts. However, technological innovations in the fields of data processing, AI, and advanced automation are enabling consumer goods suppliers to receive data from their retail and wholesale partners, gaining visibility into sales forecasts and volume information.
The majority of sales teams (83%) are using retail data to build more accurate sales estimates and plans. Retail data helps sales teams gather insight into their own product portfolios and improve decisions around pricing, space management, and assortment planning. Supply chain planners combine traditional reorder and historical data-based forecasts with current retail data to accurately forecast consumer demand — ultimately improving availability and customer service.
Many retailers and consumer goods brands can easily see the value in supply chain collaboration. Nearly half of the respondents would like to have more data pertaining to sales forecasts and volumes than they already receive. Additional opportunities identified by suppliers were focused on promotional and inventory data.
Mikko Kärkkäinen, CEO and co-founder of RELEX Solutions, says: “Consumer goods suppliers can easily envision a future of close collaboration with their retail and wholesale customers. Suppliers must build on processes that use direct, clear, and regular communication, allowing them to work with partners toward mutual business goals.”
If data is king, communication is queen. More than 53% of suppliers only meet with retail customers once a month or even less frequently. Insufficient meetings result in suppliers struggling to understand their customers’ needs and working together on mutual goals. Complications also occur when suppliers and retailers are using incompatible planning software that are incapable of “speaking” to each other. The fact that 93% of suppliers still communicate with their retail customers by email or phone call only adds additional work on the part of those responsible for customer communication.
Kärkkäinen concludes: “To thrive during this period of global economic instability, retailers must focus on collaboration and intelligent data to streamline their efforts and add value to their business. Increased communication between partners will improve demand forecasting as well as promotional change accuracy. Digital solutions that automate data sharing and collaborate visibility eliminate manual work and provide more relevant data reducing the risk of supply chain disruptions”.
Other key takeaways from the report include:
- While the majority (78%) of retailers receive some commercial or supply chain planning data from their partners, a surprising 22% reported not receiving any data at all.
- Most respondents (87%) would like to collaborate more with their partners.
- Most suppliers report that data is used most frequently by sales departments and supply chain planners.
