The Future Of Retailer-Supplier Data Sharing

  • The big news out of the US this week is the announcement that Walmart will start sharing scan data with AC Nielsen for the first time in a very long time.

    According to an article in Retailing Today, the deal between Nielsen and Walmart, was negotiated by Cindy Davis – Walmart’s EVP of Global Customer Insights.

    The Walmart US business has been struggling and this may have prompted the world’s largest retailer to reconsider how it shares data with vendors outside of its Retail Link system.

    In Canada, AC Nielsen key account data is currently available to Walmart vendors in addition to access to Retail Link data provided by Walmart’s proprietary systems.

    However, Walmart vendors can only “see” Retail Link data as it relates to their own brand’s sales. The data is rich (and overwhelming) and is of a much higher quality than key account data provided by AC Nielsen, as it is provided at the store level with almost real-time data flow.

    The exception is Category Captains, who have access to all of the data in a particular category (own brands, private label and competitive brands). The data is used for Category Management purposes and is supposed to stay segregated with the Cat Man team (not shared with KAMs and other vendor staff).

    We feel that Walmart is a pioneer given how much data they already share with vendors through Retail Link and this has been an advantage vs. its competitors who have been notoriously stingy in sharing data (you know who you are).

    To be honest, the big winner in the expanded Walmart US coverage is AC Nielsen who can now take a price increase to support its “increased coverage” of Walmart. The challenge for Nielsen is that its business model is becoming more and more obsolete everyday due to the next generation of data that is available to retailers and vendors.

    The future of retail data actually lies in loyalty card data. Most retailers use loyalty programs to reward shoppers with points but do little else. Some have sold the data to vendors at exorbitant prices for direct mail programs and other promotional initiatives.

    The real leaders are those who are beginning to take the loyalty card data and turn it into shopper insights as Tesco has been doing since 1994. In Canada, Metro has partnered with Dunnhumby (Tesco’s partner) and Sobeys just announced a program with Aeroplan’s analytics group.

    When we are able to understand what an individual shopper is doing and how our actions (promotions, pricing, plan-o-gram, display, assortment) affect those shoppers, then we can make solid business decisions that will grow the category (and in turn sales of both national brands and private label).

    Canadian retailers who really want true shopper insights would create a data sharing system that includes a Retail Link type system for POS data and integrates loyalty card information a la Dunnhumby.

    Some retailing executives will see this mountain of insight-rich loyalty card data as an opportunity to increase fees / trade terms associated with data sharing.

    The real leaders will not charge for the data at all – instead gaining from the shopper insights the army of vendor category managers and key account managers would bring to them.

    The result would be increased sales and profits and less of an addiction to price discounts which are spiraling out of control in Canada.

    Retailing is about profitable sales to satisfied shoppers. Not selling data to vendors.

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