Better data sharing between retailers and CPG manufacturers can help overcome supply chain challenges, says Inna Kuznetsova, chief executive officer of 1010Data.
Several trends in retailer and consumer behavior emerged toward the end of 2021 and into early 2022. Kuznetsova says. One is the “astonishing” growth of subscriptions — they jumped 140% in the last year, having doubled in 2020. The model is being embraced not just by retailers, who stand to boost sales and customer loyalty, but also by consumers themselves, in product categories such as vitamins and skin care.
Another major trend is a big increase in retailers’ dependence on private labels. That practice goes back many years to big-box stores, but it has also caught on in a big way in e-commerce. Amazon has introduced multiple private labels among its offerings, and traditional retailers are doing the same. In the process, they boost profitability, obtain a higher level of control over their supply chains, and help to ensure that sufficient product is on store shelves, whether literal or virtual.
The challenge for retailers and CPG companies today is to manage the cost of inventory, of which they need more now, thanks to major disruptions in supply chains over the past two years. But it’s not just about flooding the supply chain with safety stock. “The only way to ensure that the cost of inventory is under control is to ensure that you have the right inventory,” Kuznetsova says. And that means maintaining flexible forecasts with highly granular views of consumer demand.
To keep pace, retailers and CPG companies must do a better job of sharing data on a real-time basis. That’s especially important when it comes to promotions, 70% of which fail, necessitating the ability to reset a promotion while it’s underway — not months after it’s over.
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