How to keep retailers, suppliers and consumers afloat in the data deluge
Date: February 21, 2018
Category: Opinion piece
The 12th of January 2018 marked the 70th anniversary of the supermarket in the UK, marking seven decades since the London Co-operative Society opened its doors in Manor Park in East London.
The concept of helping oneself to produce with your own basket having previously ordered item-by-item from a shopkeeper (or at least been watched, hawk-eyed, by one) was a novel one, but it was clearly a format that caught on given the ubiquitous presence of supermarkets – and their convenience-sized cousins – all these years later. That’s not to say there haven’t been changes though, with the rise of self-check outs and Amazon’s latest foray – this time into grocery stores with its Go stores – removing the need for check-outs all together, with smartphones and sensors doing the hard work.
But while the rise of technology has made things simpler for consumers at the front end, there is plenty going on at the back end in order for this ever-more convenient experience to be achieved. None of this innovation is possible without product data, but even the way it is captured and shared isn’t as simple as you think. With many suppliers offering hundreds of different products (all with their own unique information around nutritional details, allergen information, sugar percentages, provenance, expiry dates and much more) to thousands of different retailers, you’d think it would make sense for there to be some sort of universally-agreed system in place through which to disseminate such data.
Of course, common sense doesn’t always prevail and until now, the various different parts of the retail ecosystem have wanted to do things their own way or have been unable to broker a mutually agreeable format for all parties. Our research found that with average, large FCMG suppliers typically working with around 55 grocery retailers and wholesalers at any one time, there are huge cost, time and logistical implications to the current status quo. Factor in increasing regulatory requirements driven by issues such as the healthy eating agenda and the sugar tax and the industry as a whole can no longer keep its head in the sand if it is to win the data war.
At GS1 UK, we’ve been setting standards for years using barcodes, RFID tags and product data management to support supply chains. And, in conjunction with the Retail Grocery Advisory Board, we think we’ve come up with a solution to this complicated conundrum – a single source of trusted data that can drastically reduce the amount of back and forth in one fell swoop. productDNA:hub provides a uniform catalogue of product data and imagery, independently audits the data to ensure its accuracy, and then shares it in a consistent format. A standardised system such as this will have obvious time and cost savings, as well as improving logistical and warehousing efficiencies. It also frees up resources and capacity for food and drink manufacturers to spend more time on what actually makes them money – R&D and innovation – rather than being deluged by data difficulties.
Another main benefit of productDNA:hub is that it is a far more democratic, fairer system than that in place at present. Rather than making suppliers bear the brunt of the costs in order to woo retailers, we propose sharing the load and grading costs to make life easier for smaller suppliers. With online grocery retailing growing by 12% a year – an area where data is more crucial than ever given customers can’t touch and feel what they are buying – the need for improved data is more pressing than ever and the sector needs a new system if it is to cope with ever-increasing demands. It is estimated that poor product data currently costs the UK grocery industry upwards of £200m due to inefficiencies and – extrapolating figures where similar systems have been implemented in overseas markets – we calculate that productDNA:hub could lead to benefits of around £20bn if utilised successfully in the UK; no small change.
As a neutral, not-for-profit standards organisation, we want a system that works smoothly and fairly for everyone, not just a select few or certain pockets of the supply chain. And with the likes of L’Oréal, Mondelēz International, Nestlé, P&G, PepsiCo, Unilever, Co-op, Itsu, Ocado, Sainsbury’s, Tesco, and Waitrose already having signed an industry charter committing to adopt a single product data and image service, we’re obviously not alone in that desire.
productDNA:hub won’t solve an entire industry’s data issues overnight, but we believe a single, universal system will have long-term benefits for manufacturers, retailers, suppliers and, most importantly of all, consumers. And, just like the supermarket, we’ll soon wonder how we ever lived without it.
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