The rate of change has never been greater — or faster — for the footwear industry, with new challenges popping up every day in nearly all corners of the business, from navigating cash crunches and supply chain issues to understanding the latest technological advances. In its “Ask An Expert” series, FN asks industry leaders — all solutions-based providers — to take on some of the most timely topics.
Everyone in the industry is aware that data can help businesses refine their operations, but often the focus is on how to use this information internally and not on its external applications. While internal processes can definitely benefit from data analysis, the value of improved data sharing between supplier and retailer is frequently overlooked – with damaging consequences. Particularly as retailers expand their revenue channels and brands look to onboard new retail partners, establishing an accurate and reliable data reporting system could be the difference between high margins and excessive markdowns.
Gil Hakami, VP of business development at data reporting platform SKYPAD, spoke with FN about the importance of consistent data sharing, the specific needs of small business and how technology can streamline this process.
FN: What are some of the biggest challenges that suppliers face when trying access sell-through data from retail partners?
Gil Hakami: As data becomes more and more business-critical, legacy systems and an absence of data-sharing practices have proven to be a major challenge for multi-brand-retailers and wholesalers – one that ripples across the supply chain. The core issues the industry face include disparate sell-through data sources, from emailed reports and vendor portals; inconsistency in metrics, product granularity and the frequency of information sharing with suppliers; and the disconnect from internal supplier language, systems and applications.
Collectively, these core challenges lead to drastic inefficiencies for both retailers and suppliers. Without systems and processes in place to generate consistent access to sell-through performance metrics, suppliers are unable to identify trends and target opportunities that can maximize business at retail. Instead, suppliers are left managing an overwhelming number of spreadsheets and complex systems, to manually prepare a high-level overview perspective at wholesale.
FN: How do these challenges at the reporting level lead to markdowns at the end of the selling cycle?
GH: Without consistent, seamless and granular access to sales and inventory performance metrics, opportunities are being missed. Decisions are driven by “gut” rather than by data analysis and so products run their course, from full price to markdown.
Considering in-season activity as a moving target is critical but it requires the right tools, training and collaboration. Weekly analysis of your suppliers will increase visibility into immediate opportunities that, when acted upon, can correct the course and maximize sell-through. This agile approach can only be achieved when the supplier is considered an extension of the retailer’s buying team. Suppliers are eager to ensure their brand performs at the most optimal state. Enabling them with the right data and tools to analyze sell-through performance – whether by style, color, size, location or channel – yields a buyer’s best ally: an analytics-driven brand expert.
FN: What are the differing needs of smaller brands versus larger or multi-brand companies, when it comes to managing this kind of data?
GH: Dependable access to sell-through data is a critical need for brands of all sizes, yet what varies is how this information is consumed and therefore the extended value that can come from it. Smaller suppliers and emerging brands typically do not have the dedicated IT resources to support complex reporting programs. Yet the vast majority of the supplier community belongs to this group. Their lack of tools creates a major dependency on the retailer’s buying office to share emailed Excel reports, but emailing reports to 75% of your supplier community is not a scalable approach; it’s a productivity killer. The need here is simple: eliminate manual reporting dependencies between buyer and suppliers. Equip these brands with a standardized set of information, within an interactive tool, to enable self-serve access to analytics.
Larger more established suppliers have invested in resources to help maximize business potential with their partners. However, these systems are only as good as the data that feeds into them. The need is the same: automation, consistent metrics, etc. – but the return value is much greater. Supporting suppliers’ internal tools, whether it be reporting, planning, or forecasting, will enable an enhanced level of insights and a more strategic business relationship with these key partners.
FN: What are the advantages of using technology to streamline this process?
GH: Establishing the right technology-supported processes is critical for an effective data-sharing program. The first key advantage is standardization: establishing a consistent set of information to be shared across the supplier community, preventing one-off engagements. Automation eliminates the manual processes around compiling and emailing reports, which frees up employee workloads and reduces human error. Through automation, deeper granularity into size and location-level detail can also be made available. Another advantage is self-serve reporting, as this terminates the data-dependency between supplier and buyer.
FN: In what ways might improve communications around selling and inventory data benefit the brand-buyer relationship?
GH: Leveraging a reliable, collaborative dataset will undoubtedly improve the supplier-buyer relationship. With insights at hand, both parties can work together as a team to maximize busines potential. Productivity will increase, as a more informed supplier can present targeted reorder opportunities, fill-in and transfer suggestions, etc. This proactive approach will prevent stock outs, broken size runs, inventory waste and most importantly, a frustrated shopping experience
To take it a step further, suppliers are evaluating their business partnerships in a post-covid world – and they will be more inclined to build relationships with those retailers willing to partner through data-sharing. The pandemic revealed just how quickly the industry needs to be able to adjust and the role data plays in being able to do so. It also confirmed how inefficient current data-sharing practices are. Suppliers are gravitating towards business opportunities that include access to the data needed to be successful.