Seeing Clearly Now: The Benefits of Data Exchange in the Retail Supply Chain

That was the top takeaway from RELEX Solutions’ 2023 Supply Chain Collaboration Report, with insight from 250 suppliers across the U.S., Europe, and South America. Respondents said the desire for collaboration is there — 87 percent said they wished they could collaborate more with their retail and wholesale partners — but there are gaps in communication. Only 26 percent said data from their retail partners is easily usable throughout their organization.

Siloing data is a surefire way to stifle innovation. However, working to ensure better collaboration and data sharing between retailers and suppliers can positively impact business for all involved.

The Benefits for Retailers

The lingering impacts of the pandemic may finally be dissipating, but lessons learned will live on — specifically, the need to avoid uncertainty. Retailers must have visibility into product availability levels, when inventory will be arriving, when it needs to move from the stockroom to shelves, and who on staff will be available to move it. Without access to this data, retailers run the risk of inadequately stocked shelves and, ultimately, lose out on revenue.

By enabling deeper data exchange with their suppliers, retailers can make informed, data-driven decisions about their assortments, promotions and supply chain planning. Inventory management tools make it easier to understand when shipments are coming in and align that data with availability and demand forecasts, allowing stores to take steps such as leaving less in-demand goods in the stockroom and focusing limited labor on moving popular items to the shelves. This allows retailers to clearly see what goods their suppliers expect to run short on over the coming months so that they can stock up or find alternatives before supplies run dry.

The Benefits for Suppliers

As manufacturers try to do more with limited resources, determining which products reach the assembly line and when they leave it is critical. For suppliers, the focus needs to be on what’s most profitable and most in demand. Without accurate data from their retail partners, making that decision can come with unintended and costly consequences. When more manufacturing resources are dedicated to producing unpopular products, the manufacturer is likely to be stuck with unwanted inventory taking up room in their distribution center — and with fewer resources available to manufacture in-demand goods.

Through improved data exchange with the retailers, however, suppliers can stay one step ahead of demand. Data automation ensures the supplier can expect sales and inventory updates at a consistent time each week. Visibility into which stores need which products helps the supplier to better direct their regional manufacturing.

When a supplier’s facilities have the insight necessary to run like a well-oiled machine, goods move out the door and into distribution centers quicker, and shelf space remains open for when the supplier needs to stock more of a popular product.

Data also helps suppliers and retailers collaborate on promotion planning and effectively marketing products. Insight into sales trends can help suppliers determine which products they want to promote (and for how much) and helps retailers to clear overstocked products from their inventory.

Success is in the Data

As suppliers expand their SKUs and retailers grapple with changing consumer demand seemingly overnight, the modern shopping experience is far too complicated to navigate using manual forecasting and replenishment technologies. Continual insight is needed to ensure suppliers focus on manufacturing the right products, and retailers ensure they’re getting the products they need on their shelves.

By committing to improved data exchange and collaboration, retailers and suppliers can support each other’s operations — giving the necessary teams throughout each organization the visibility to make long-term, data-driven planning decisions. When both parties are empowered to collaborate, success follows.

Greg Wilson is vice president of field strategy at RELEX Solutions, a provider of unified retail planning solutions.