Information is king. No question about it. Smart retailers and manufacturers are hungry to understand who their customers are, what products are selling, how to make deep cuts in supply-chain costs and, perhaps most important, what products are at imminent risk for being out of stock and thus alienating customers?
The problem, of course, is how do you get your hands on the types of information that can make a meaningful difference in business results and do so quickly enough — as in real time? Talk about survival — those at the bottom of the information revolution are not long for the retailing world now emerging, and those in the middle or even at the top had better be ready for what’s coming.
Do you know which products are in danger of being out-of-stock? And if you do, do you have the systems and processes in place to get more product to the shelf before the hole appears? Do your product suppliers have access to that information in real time and are they prepared to stock the shelves before their items sell out? Do your merchandising and other business teams care?
They better. Business practices are about to change radically in the replenishment arena — and it is not all about radio frequency identification and future technologies. Think the idea of a simple Web portal that allows trading partners and internal merchandisers alike to view products sales trends in real time is five years out? Think again. Smart & Final is doing that today. Procter & Gamble is rolling out a device at one major chain that tracks product movement, discerns sell-through patterns, detects potential out-of-stocks and alerts the store manager automatically in time to keep the product flowing. And an industry survey of major retailers found that having a single view of the customer and products throughout the company is one of the top strategic goals impacting information technology departments. See articles on all of these developments in this section.
This revolution, obviously, is all about money, but it isn’t all about rocket science (at least for the most part.) The changing business scenarios now taking shape involve changes in work processes as much as leveraging new technologies.
I am absolutely one of the biggest skeptics when it comes to promises regarding the latest and greatest IT inventions. Please. The industry is littered with technology failures. But this stuff isn’t the latest and greatest. It is happening today and is being driven as much by new understandings of how to use existing technologies as by emerging research and development potential.
It is an exciting time to be in retail, to watch retail and even to shop retail. But those that lag in appreciating the information revolution now under way are going to have a tough time keeping up with the Joneses, much less the new store down the street.