Executive Briefings

Recession Doesn't Hamper Growth of Demand Signal Repository Market

The Demand Signal Repositories (DSR) marketplace had year over year growth (2009 over 2008) of 49 percent," according to Steve Banker, the service director for supply chain management at ARC Advisory Group.  Banker, the principal author of ARC's Demand Signal Repositories Worldwide Outlook, notes that this growth occurred in the midst of a large global recession. "No other enterprise market had close to this kind of growth," he says.

A DSR is the core database that holds store-level data for use by a consumer goods company. DSRs can also include a variety of data streams, but if the repository does not include the ability to leverage store-level demand data - particularly POS data or Direct Store Delivery (DSD) data - it is not a DSR.

The DSR marketplace also includes the analytics or applications that leverage the data from a DSR to allow profitable collaboration with retailers. These applications are used by retail account teams, category managers, marketing professionals, supply chain teams, and the store merchandising team (which is often a third-party partner).

ARC is forecasting the market will grow at a much lower rate in the future than has occurred in recent years, but that it will still grow at double-digit rates over the next five years. This conservative forecast reflects ARC's belief that while the potential ROI of these solutions is massive, the hurdles that must be overcome to gain those kinds of returns are also huge.

These potential savings have driven continuing investment and experimentation by the largest consumer goods companies in the world. However, ARC's conservative forecast reflects the inability of consumer goods companies to fully overcome the barriers, and learn how to effectively scale these solutions.

These barriers fall into three categories: cultural, technological, and cost. The cultural barriers are the most difficult to fully overcome. 

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The Demand Signal Repositories (DSR) marketplace had year over year growth (2009 over 2008) of 49 percent," according to Steve Banker, the service director for supply chain management at ARC Advisory Group.  Banker, the principal author of ARC's Demand Signal Repositories Worldwide Outlook, notes that this growth occurred in the midst of a large global recession. "No other enterprise market had close to this kind of growth," he says.

A DSR is the core database that holds store-level data for use by a consumer goods company. DSRs can also include a variety of data streams, but if the repository does not include the ability to leverage store-level demand data - particularly POS data or Direct Store Delivery (DSD) data - it is not a DSR.

The DSR marketplace also includes the analytics or applications that leverage the data from a DSR to allow profitable collaboration with retailers. These applications are used by retail account teams, category managers, marketing professionals, supply chain teams, and the store merchandising team (which is often a third-party partner).

ARC is forecasting the market will grow at a much lower rate in the future than has occurred in recent years, but that it will still grow at double-digit rates over the next five years. This conservative forecast reflects ARC's belief that while the potential ROI of these solutions is massive, the hurdles that must be overcome to gain those kinds of returns are also huge.

These potential savings have driven continuing investment and experimentation by the largest consumer goods companies in the world. However, ARC's conservative forecast reflects the inability of consumer goods companies to fully overcome the barriers, and learn how to effectively scale these solutions.

These barriers fall into three categories: cultural, technological, and cost. The cultural barriers are the most difficult to fully overcome. 

Read Full Article