The 2004 Presidential Election is amazing to watch due in part to the daily election polling that is taking place. Whether candidates admit to it or not, the scientific polling done by both internal and external organizations actually drives and motivates the daily activities of the campaigners. Where they go, what they say, who they say it to and the marketing blitz are absolutely driven by the polling numbers. These critical polling numbers are not at the national level, but are derived from the precinct level, up to metro and rural numbers, and finally tabulated at state level. The press may focus on the national surveys, but the campaign managers focus at precinct level, state by state. When you step back and look at this process of detailed analysis of how the voter will choose it makes me ask the question why the retail industry is not spurred to excel in this type of activity.
Yes, I am aware that a flood of data is available to those who wish to dig deep into the analysis and the software tools available to speed the process. There is a growing list of retailers in all sectors who are sharing POS sales activity along with inventory data in order to partner up with suppliers. The goal is to better understand and react to what is taking place at store level with the consumer. There is a clear understanding of a "shared value" to the critical information and data. Everyone knows it is financially painful to both retailer and supplier when the consumer experiences out of stocks at shelf level.
The beauty of shared POS data and timely inventory information is that you are not working with a survey mechanism that has a stated margin of error. POS activity is real time data telling you exactly how the consumer is choosing at shelf level, by item and store. Unfortunately, what I see so often today at supplier level is this store specific data being driven up to category or chain level for analysis. When this takes place in an analysis of a retailer that has plus one-thousand stores, it is easy to miss fifty to one hundred stores that may have recent negative sales trends or inventory issues due to multiple reasons. I see this get labeled "what falls through the cracks". In today's highly saturated and competitive market, no retailer or supplier can afford this type of high level, inept analysis that motivates no activity to resolve the missed sales or excess inventory opportunity. I believe it is critical for suppliers who receive shared data from participating retailers to dive into store and item level analysis and determine root cause issues on missed opportunities, such as in-stock, promotions, sales forecasting and new product launches. When identified with accurate documentation the supplier must seek out collaborative efforts with retailer to resolve for the consumer at store level with a high sense of urgency.
We will soon know the outcome of our Presidential Elections and the success of those who formulated the campaign. With the stakes so high the winner will not risk their efforts on surveys and rolled up polling information at a national level. There's no margin for error in an election year and there can be no margin for error in detailed analysis of business trends that affect the lifeblood of a supplier and retailer. Those who serve the consumer and seek to have a positive response to their shelf level decisions, your election victory is published everyday on Wall Street and you will be rewarded long term if you consistently outperform the consumers expectations.
This editorial was published by DSN Retailing Today on October 11, 2004.
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