A New Kind of Data Need for a New Kind of Retailer

By Evan Schuman  |  Posted 05-17-2006
As retailers find dollars by having certain stores specialize in various ethnic or lifestyle segments, they are often neglecting to update their store data to match, so finds a new Forrester Research report.

This is a matter of frustration among some consumer goods suppliers, who now need to know more about those customers. A product that appeals to only 2 percent of shoppers should be viewed very differently, for example, if it happens to be appealing to 85 percent of Hispanic shoppers or 86 percent of vegetarian shoppers or 89 percent of senior citizen shoppers.

Some of the nation's most influential retailers—including Wal-Mart, Kroger, BestBuy and Safeway—have been leading the subspecialty way, creating for manufacturers both segment salvations as well as niche nightmares.

Many major manufacturers are "very interested in getting a better view of what is going on in the store," said Christine Spivey Overby, Forrester's principal analyst for consumer products. "Syndicated data hasn't been used in this way, and the shipment information only gives a view of where the product is up until distribution. It doesn't really give the last-mile view."

"To build relevance with today's shoppers, brand manufacturers from Kraft Foods to Sony need a clear picture of what's happening in the store," the report said. "This requires manufacturers to tap new types of retail data—such as more granular point-of-sale (POS) and loyalty data—that provides store-level insights about product movement and shopper behavior."

The report—based on a Forrester survey of 80 retailers and interviews with consumer goods manufacturers—found that 68 percent of manufacturers "believe that retailers don't share enough data or the right types."

"It's clear that the sharing of more granular store and shopper data is in its infancy. Few retailers release store-level POS data directly," the report said. "Store-level POS data enables manufacturers to tailor replenishment tactics, resulting in higher in-stocks and the capability to handle local assortments and promotions. But only 19 percent of retailers release store-level POS data on a regular or extensive basis. More than half don't share it at all."

The report added that even fewer share market basket data, which would help manufacturers influence pricing in niche locations. "Nearly two out of three retailers keep market basket data to themselves," the report said.

Read the full story on eWeek: A New Kind of Data Need for a New Kind of Retailer