The number of major retailers releasing point-of-service (POS) data
to suppliers continues to grow. Retailers are increasingly likely to
understand that sharing POS data with suppliers helps enhance supply
chain performance, and many retailers are turning to increasingly
sophisticated systems to release this data regularly.
From
the retailer’s perspective, sharing their POS data is a win because
they can improve customer satisfaction by reducing out-of-stocks and
preventing oversupply. In a recession, ensuring that your shelves are
not overstocked is critical. Suppliers can stock far more accurately
and reap the rewards in higher sales. WalMart has led the field in this
area: through their RetailLink® service, WalMart provides their
suppliers with POS data, free of charge. Late in 2008, Walgreens began to provide suppliers with data daily, indexed by item.
Other
retailers are taking steps in the same direction, albeit more
cautiously in most instances. Industry insiders point to Kroger,
Loblaw, Target, Whole Foods, Publix and Home Depot as other retailers
who have begun passing POS data to their suppliers. However, some
retailers are choosing to release POS data either selectively, to top
suppliers only, or are charging suppliers for the data.
One
thing none of them have realized yet: these reports contain a lot of
data, and the analysis demands some heavy numbers crunching for
suppliers to gain actionable insight. What we have learned working with clients who analyze RetailLink data is that strong, flexible visual interfaces make this very location-intensive data far easier to understand.
One
important use of POS data at the store level is to reveal
patterns of sales strength and weakness. Understanding the reasons for
the pattern allows you to correct the bad and exploit the good. For
poor sales: is it
too many out-of-stocks? Distribution issue? Did it rain all week? Or,
if you sell umbrellas, did it fail to rain all week? Does the store
attract enough of my target demographic? Is my competitor in same
store? Is my competitor
next door? Has there been a price cut by a competitor that I had been
beating?
All
of the above information can be found, bought, or extracted, then mapped and
correlated. Once you understand WHY, you can start taking
corrective action.
So
how do you effectively leverage the power of the POS data, which can
mean manipulating thousands if not millions of data points? Using
AWhere’s mapping software, you can both visualize POS information
quickly and access specific store lists instantly.
Below are
a series of maps from a major American retail chain that has
implemented a POS data portal for its vendors. Working with our
client, we indexed each store to relevant demographics (incidence of
African Americans in the first, incidence of people over the age of 65
in the second) in order to identify the right location for specific
products of particular interest to those groups of consumers.
This first image shows all the retailer’s 960 locations,
highlighting in green all the stores that index at over 150 for African
American households in the immediate vicinity. You'll note the clusters in South
Atlanta and Central Florida.
The next map highlights stores that index at over 150 for the over 65
age group; their strong influence is clearly visible along
the Florida coastlines and in Hilton Head. 
This final map of the stores in the Atlanta Metroplex shows ethnic mix per
store. Gray is African-American, orange is Hispanic, yellow is
Asian, and green is White (non-Hispanic). The strong presence of Asian
and Hispanic on the NorthEast side of the city is easily seen on the
map.
With
this type of information available in a visual analysis, decisions
about how to stock products can be reached much faster, and with
greater accuracy than if you were doing the same analysis in a
spreadsheet.
We like to talk about all kinds of practical applications of location intelligence and geo-analytics. Please contact us with any questions.
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