February 28, 2017 Opinion piece
Jim Dickson, Industry Engagement Manager – Retail/CPG at GS1 UK outlines how this approach will enable retailers and brands to innovate more in their businesses
Digital DNA is a collaborative programme bringing retailers and brands together to design and create a common industry approach to manage and share product data across the UK grocery sector. The new programme is helping the industry prepare for the future, where retailers and brands are better placed to make informed decisions – based on accurate data.
When it comes to managing product data, it’s long been recognised that there are many inefficiencies in the industry – in fact, it’s estimated that the UK grocery sector is incurring £140m of direct costs each year as a result. These inefficiencies are often hidden in duplicate processes, manual checks and non-value added activities and impact not just the bottom line, but speed and efficiency of moving products through the supply chain too. The goal of the Digital DNA programme is to remove these inefficiencies.
By agreeing a set of industry-governed data models and harmonised processes, retailers and brands can reduce or even eliminate many of the unnecessary tasks and complexities they struggle with today. The upside of this is that they will spend less time on non-value added activities, freeing valuable resources which can then be used to focus on what really matters to them: differentiating themselves from the competition and investing in new product innovation and new channels. Ultimately this will lead to real and sustainable sales growth.
Through work with PA Consulting we’ve calculated that by grasping these opportunities, the industry will benefit from saving at least £200 million per year in costs and lost sales. But the PA report goes further, showing that there’s great value in agreeing a single industry approach. They highlight examples of other countries, such as Canada, Sweden, Australia and the Netherlands, where common industry platforms for product data management already exist and deliver tangible, quantifiable benefits.
- Higher sales, lower costs – in Sweden in particular, suppliers have increased their sales by 1-3% while decreasing their cost of sales by 5%
- Clear accountability – in these data sharing models, there is clear responsibility for creating data quality, clear processes for handing off information from retailer to manufacturer and ongoing monitoring of data quality. So, transparency breeds confidence and trust
- Industry consensus on changes – solutions owned by the industry are not at the mercy of changes made by the solution providers or third parties. A central point is created where agreements are reached on decisions that affect everyone: about data attributes, data auditing and solution development
The Digital DNA programme is now moving forward – and fast. Our work with a group of leading retailers and brands is progressing quickly, and we’re setting out a clear proposal for how industry will manage and share high quality product data – which will enable UK grocery to make a significant leap forward and prepare for the exciting future ahead. Because by reducing existing complexities and eliminating so many non-value added activities, retailers and brands will have a great opportunity to differentiate, innovate and grow.
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Digital DNA - An industry programme to deliver high quality product data