Why Retailers Shouldn’t ‘Break the Wheel’ in 2020, But Rather Discuss the Wheel
As we move further into 2020, the line between how retailers define luxury, especially as it pertains to consumer taste and expectation, has become an increasingly communal process. In order to achieve success, brand representatives and buyers have gravitated towards listening to their customers, engaging with them via social media, and including their feedback throughout the entire process. Moguls on the high end, such as Rihanna and Kim Kardashian-West, who have built empires on this method, thrive in the retail sector, while others are just beginning to feel the negative effects. Simply put, the “woke” generation is costing retailers millions in lost revenue.
While retailers consistently nurture their relationships with customers, the exact opposite is happening when it comes to their brands and suppliers. Optimal consumer focus relies heavily on technology platforms that enable digital sharing of sell-through performance data, and retailers haven't adapted their practices to reap these benefits. This allows retailers to engage in more meaningful conversations about selling patterns, which is beneficial to buyers and sellers. The next decade will prove the most promising for retailers to align with companies that have the capability to distribute data to their brands in meaningful ways for the retailer and its brands/suppliers.
Here’s how retailers can implement solutions that ensure they're meeting and exceeding their brands/suppliers expectations:
Smell the Roses, Your Spreadsheet Isn’t Great
One might wonder why retailers haven't created their own platform to share digital sell-through data with their brands/suppliers. They can and they have, yet they have all failed. Why is that? Those that developed their own data distribution method have failed to meet their brands’/suppliers’ needs. The data sharing tools created by the retailers are not easy to use and create more problems than benefits for the brands/suppliers, as well as their own merchants. Every retailer has their own way of sharing data (e.g., EDI, spreadsheets, PDF, retailer portals, etc.), which means a supplier/brand has the cumbersome task of compiling each data set from each individual retailer.
To achieve a true partnership with the retailer, brands/suppliers need to consolidate best practices, accurate sell-through insights and consistent metrics — all under an easy-to-use platform. This can be an ambitious task for retailers because it can only be accomplished through a third-party service provider which has access to all the retailers that a brand/supplier sells to, whether it be a department store or the brand's/supplier's company-owned store. Establishing this type of setup increases efficiency and improves sales and margin results for retailers.
Amplifying the End-to-End Experience
In order to achieve the full end-to-end customer experience, retailers should integrate all of their data and management systems. Retailers make the most beneficial decisions when they're able to act on data that shows all sides of the equation. Knowing the intricacies about selling patterns is important to make sure the right products are at the right locations at the right times. It seems like an easy concept, right? It's not. Gaining foresight can be extremely difficult for retailers that don’t communicate with their brands/suppliers or don’t have a system in place that provides granular and consistent data to their respective brands/suppliers.
Luxury products housed in a variety of stores, whether it be department stores or a single company-owned retail location, can complicate how brands are able to view their actual inventory. This can directly impact the actual end-to-end sale and turn the entire experience sour for customers. Retail technology systems should provide companies with visibility into their distributed inventory enterprisewide, enhancing the customer experience beyond speed and personalization.
What it All Boils Down to …
Retailers must use advanced tools to help manage customers and make the buying journey a more seamless, convenient experience. Retailers and brands/suppliers should embrace digital solutions to transact and share data with one another in order to compete. They need to eliminate time-consuming tasks in order to reduce IT costs, decrease markdowns and improve product assortments in-store. To achieve these goals, a genuine digital alliance with respect to sell-through data between the retailer and brands/suppliers is a prerequisite. It not only comes down to fostering a partnership with your customer, but also enhancing the brand/supplier relationship to build a more effective end-to-end experience.
Jay Hakami is CEO of SKYPAD, a leading B2B SaaS reporting application that connects the world’s most recognizable brands with top retailers for product sales and inventory analytics.
Related story: How to Make Unified Retail Work