7 Reasons Retail Needs Better-Connected Supply Networks
Venzee is disrupting 4,000 years of retail trade. Here’s our case for connectivity.
Manufacturers, distributors and retailers today rely on linear supply chains to get product content from origin to consumer, but these supply chains aren’t built to handle the exponentially increasing industry demand. Despite significant investment in technology solutions, retailers still rely on too many manual processes to handle product data. Fragmented content handling processes add friction to the flow of products from manufacturers all the way to consumers. Friction due to inefficient data handling processes affects the bottom line for the entire supply chain, adding cost and time and preventing growth.
API-connected supply networks replace manual input with technology, eliminating friction by streamlining the flow of product information from brands to retailers. Manufacturers, distributors and retailers require connectivity to evolve to meet the demands of retail today.
As a concept connectivity sounds great--after all it removes friction--but, after reviewing these 7 real challenges retail faces today, you’ll see that API-connected networks are an eventuality. Modern retail needs connectivity. Period. Read on for our case for connectivity.
1. Retail is accelerating.
The entire retail industry is in a transitional period, where dated systems, manual processes, and teams of humans are being replaced with technology. At the same time, competition in retail continues, and too many retailers are seeing the ill effects of not evolving quickly enough. Retail is dealing with a number of challenges, including narrowing margins; increasing consumer expectations (often set by technology-forward leaders in the retail space like Amazon and Walmart); continued shift in consumer purchasing trends from physical to online or altogether unified commerce experiences, and resultant changes to order fulfillment, logistics, and customer service among others.
According to Gartner analysts, retail forecasts are pushing retailers to invest in digital business transformation solutions. Retailers are increasing spend on technology to prioritize analytics, digital marketing, mobile applications, ecommerce platforms and artificial intelligence (AI). Now organizations are seeing that these technologies are crucial to success, and we’re seeing the industry as a whole make its push toward a digital maturity that it had stalled until very recently (Gartner).
Connectivity facilitates an uninterrupted transition from legacy retail processes to new technology solutions and automations, minimizing loss or slow downs due to gaps or delays in service. Connectivity supports efficient change management for even the biggest of enterprises.
2. Manual content handling results in loss due to bad data.
It is estimated that returns due to inaccurate or incomplete product information cost online retailers over $100 billion annually. These costs include return shipping, vendor chargebacks, and the loss of future sales as a result of damage to one’s brand. Mistakes are largely the result of human error and are driven by the lack of scalable, efficient content delivery technology. An incredible amount of information flows through the retail supply chain non-stop and brands, manufacturers, and retailers use a number of different technology partners whose systems are not interoperable. This means that staff often have to manually process spreadsheets to a format their technology can process. Venzee’s Mesh API replaces this fragmented, spreadsheet-driven process with automation that processes information faster than humanly possible to the real-time requirements of retailers - eliminating the potential for human error. Online retail is expected to be a $4T market by 2020. Inaccurate product information is currently a huge cost for retailers with 40% or more of returns caused by mismatched descriptions, color, size or images (CrowdANALYTIX 2017). As the market grows, this problem will grow with it.
Better-connected networks reduce manual processes, minimizing opportunities for error. Consistent, accurate, and complete product data passes from system to system, reducing loss due to return shipping, vendor chargebacks, or the loss of future sales due to poor customer experience.
3. Getting new products for sale in front of customers is unnecessarily difficult.
The majority of retail suffers from long onboarding cycles for new products. It’s not uncommon for a big box retailer to take anywhere from a month to several weeks to onboard new product lines. In a $2T online retail market, every month costs $100-200B in lost sales-- and these delays become more expensive as the online market grows. The slow onboarding issue becomes more obvious (and expensive) during the holiday season. To prepare for the holiday rush, large retailers like Walmart may need to onboard 5-10 million new products onto their marketplace. To manage the increased throughput, retailers increase the size of their content teams and hire data entry clerks to manually update product data, but manual labor costs a lot, and it isn’t a solution that effectively scales to meet demand (CrowdANALYTIX 2017).
Better-connected supply networks would reduce the speed to market dramatically. In an API-connected supply chain, retailers wouldn’t have to relegate product onboarding to peak seasons. Product availability wouldn’t be limited by labor constraints, it would be a retailer’s strategic choice.
4. Day-to-day updates to product information take too much time.
Retail still runs on spreadsheets--and that’s bad. With spreadsheets serving as the backbone of content distribution, product information originates from manufacturers and is enriched (and sometimes stripped, depending on the receiving system’s constraints) as it’s passed along a linear supply chain where it’s moved from spreadsheet to spreadsheet. Even the most sophisticated spreadsheet (e.g., Excel with VBA validation) relies on humans to input content. With such fragmented processes, it’s no wonder that retailers struggle to get complete, accurate product information.
Connectivity replaces spreadsheets with machine-to-machine connections that collect, transform, validate, and distribute product data automatically. Connectivity facilitates faster updates that are unhindered by human input.
5. Better consumer engagement requires more data.
“Rising customer expectations for seamless brand experiences underscore how important it is for commerce solutions to work together more closely than ever to harmonize information across systems and touchpoints.” - Brendan Witcher, Forrester Research.
As consumers drive the market, companies must consider how to better collect, manage, and analyze the data from consumer engagements. In most supply chains, this data is relegated to silos by organization, and often further siloed within organizations by department or function. The lack of connectivity makes it impossible to analyze data effectively, let alone action any learnings from the data that would improve brand experiences across systems and touchpoints.
Connectivity empowers brands, manufacturers, suppliers, and retailers to share data across organizations seamlessly, enabling them to respond to learnings with urgency with unified strategies to improve brand experiences across the entire customer journey and impact business results in a measurable way.
6. Organizations can’t respond to change fast enough.
Rolling out changes in retail supply chains that are made up of numerous external relationships takes too long. With the volume of data increasing as well as the number of parties involved (both internal and external), the challenge becomes even more complex. A key limiting factor in retail’s response time is the speed with which organizations can distribute product data.
And when unforeseen external factors come into play, brands and retailers must deal with the fall out, often to the tune of millions. For example, In October 2018, the US Postal Service announced an increase in rates to send packages. Credit Suisse analyst, Stephen Ju, reported this hike could cost Amazon between $400M & $1.1B, which doesn’t include the cost of system-wide price and third-party site changes (CNBC). How will Amazon scale these changes?
Competing and succeeding in retail requires agility. Brands and retailers must be positioned to respond actively to consumer data and analytics.
Connectivity enables rapid delivery of information and feedback across supply networks, and intelligent content distribution supports the growing range of product information standards and facilitates compliance with numerous regulatory standards and content quality and completeness requirements set by retailers.
7. Data bottlenecks prevent growth.
Retail’s data needs are growing, and reliance on manual processes prevents retailers from growing to meet consumer demand. Here are a few obvious areas where scale comes into play:
- More products and more SKUs
- More data attributes per SKU
- More frequent changes to retailer data requirements
- Increased volume of information being exchanged
- More frequent updates to product information
- More data being passed with each update
- Brands and suppliers are selling to more retail channels
In each of the above examples, retail requires streamlined processes to manage product data. Without connectivity, retail can’t grow. Venzee offers connectivity that positions brands, manufacturers, suppliers, retailers, and technology partners to manage growth in all of these areas.
Connectivity facilitates scale. Period. Replacing manual steps with connectivity removes any limits on the speed of data exchange between trading partners. Once speed is no longer an issue, enterprises can evolve to become more adept at managing data and responding to the market.
Venzee’s API-driven solution provides the connectivity that retailers, suppliers, and content management systems need.
Venzee is solving the retail industry’s product data challenges with our intelligent content distribution platform that facilitates API-connected supply networks.
Venzee facilitates the seamless connectivity that modern retail requires. With an API-driven, intelligent content distribution platform, Venzee is the easiest way for content management systems to connect to thousands of retailer channels.
With Venzee’s API solution, organizations can benefit from the following:
Consistent data everywhere
One-to-many — Starting with a single source of truth, Venzee transforms and distributes product data to all desired sales channels.
Ability to meet changing demands effortlessly
Venzee monitors data requirements, so retailers always receive data from brands that’s complete, accurate, and error-free. Buyers are happier and products get to market faster.
Future-proof, adaptable and lean technology solution
Venzee’s pure-play, API-driven solution lets data management providers add content distribution functionality that adapts to market needs with minimal resources.
Serving as the infrastructure for the seamless exchange of product information, Venzee securely connects the data management technology of retailers, brands, and distributors, and their enterprise software partners via a single API. Our intelligent distribution platform transforms and delivers product information for over 20M SKUs across hundreds of unique formats to destinations like Amazon, Walmart, Costco, Home Depot, and Overstock.