If You are Not Adopting Collaboration, You're Falling Behind

Why is adopting a fully-integrated, collaborative environment so vital to the success of retailers and their supply chain partners? 

Simple: Because retailers and suppliers are drowing and data and are struggling to focus on the right things - those that move the needle on sales growth, and drive improved efficiencies and cost savings!                                                                                                                                                                                         As recently reported in the trade publication Integrated Solutions for Retailers, a study by Wren Solutions: "In an ironic twist, in today's day and age, where technology gives us information and multimedia content at arm's reach, it can be more challenging than ever to achieve true visibility. In most cases, the more information that is available, the more challenging it is to do anything meaningful with it. It can be simply impossible to effectively sort through overwhelming amounts of data, leaving retail managers and executives with plenty of information, but no context for situations or incidents."  The study continues: "Visibility, however, is critical to running a successful retail organization. Without an understanding of what is truly occurring on a day-to-day basis, it is impossible to make good business decisions, implement the right policies and direct resources to address priority problems."

What is the opportunity presented by a fully-integrated, collaborative environment?

A 2009 FMI Study asserts that the "typical retailer loses about 4 percent of sales due to having items of stock" and that for "faster selling and/or promoted products, the Out of Stock rate regularly exceeds 10 percent"  

A 2011 GMA/Willard Bishop study found 13.1% "under facings" in DSD, whereas a prior study by ShelfSnap found as much as 30% "under facings".  Consumers cannot buy an empty shelf!

The same GMA/Willard Bishop study identified "less disciplined retailers" as those who "experience consistent bottlenecks at the back door, create cumbersome DSD receiving environments, fail to understand the opportunity cost of ineffiency in the system, and sub-optimize their leverage of DSD resources."

The GMA/Willard Bishop study also found a staggering savings of 17,000 hours per store for retailers in a fully-integrated, collaborative environment

An 2011 Aberdeen Group study concluded that retailers who "embrace collaborative business intelligence" improve YoY operating profit at double the rate of "average and laggard" retailers

A 2011 Booz & Co. study found that "Approximately 40% [of retailers] do not know whether they are achievin ROI targets on their in-store programs, and another 20% know that the results fall short of targets."  The study finds that companies investing in collaborative technology and resources "are 50% more likely to acheive their ROI targets" that those who try to do it on their own.

A 2005 Cisco Internet Business Solutions Group study identifies the overall cost of shrink to the global retail industry to be $160 billion, or 2% of the total annual sales.  The study concludes that "retailers can reduce shrink by as much as 50 percent by using the methods and solutions" of an integrated program, such as "consolidating shrink-related information and receiving proactive alerts."  For a $25 billion grocer that embraces collaboration, the study predicts am increase in profit of $400 million, or 122 percent.

But why partner with iControl?

Read about iControl's unique approach here

Sources:  “Business Intelligence Power Play in Retail” Aberdeen Group, October 2011; “Global In-Store Practices: Results of the 2010 Industry Benchmark Survey” Booz & Company and Quofore, April 2011; “2010 Survey of Collaborative Supply Chain Effectiveness Report” FMI, GMA, and Kurt Salmon Associates, February 2010; “Using Business Intelligence to Help Control Outcomes in an Uncontrollable World” NRF and RSR, 2009; “What Constitutes Compliance?” VSN Strategies, November 2010; “The Elusive Shelf”  ShelfSnapTM  2009; “Reducing Shrink to Improve Retailer Profitability” Cisco IBSG, 2005 ;“DSD3: Driving new opportunity How innovation helps drive productivity and competitive advantage in Direct Store Delivery”  Booz & Co, December 2010; “Retailer Direct-Data: A Report” Vision Chain, Crossmark & Teradata for GMA, 2009; “Retail Out-of-Stocks: A Worldwide Examination of Extent, Causes and Consumer Response” FMI, 2009; “Driving Supply Chain Efficiency & Profitability” GMA and Willard Bishop, 200; “Optimizing the Value of Integrated DSD” GMA/Willard Bishop, September 2011