The vast majority of larger retailers offer a point of sales EDI document (852).
While these documents are rich in detailed data, many manufacturers have attempted to process 852 data and either failed or quickly found it to be a significant drain of resources – both money and time. That’s because translating EDI (and other documents required in the process) involves scrubbing, synthesizing and applying business rules, formulas and algorithms, error checking and validation.

So we thought we’d take on a timely topic for this newsletter: alternatives to EDI 852 for capturing Point of Sale data.

While some enhancements have been implemented for certain retailers’ 852 Point of Sale documents, more effort appears to be plowed into improving the data on vendor portals. This does make sense. Why not provide the tools a vendor needs to help manage the business in the most accessible format?

A complication to this matter is fact that different retailers exclude certain information from either their EDI or their portal or both. For example, higher end department stores tend to exclude On Hand and Dollars from their EDI. Others, such as Dillard’s do not offer Dollars on their web portal or in their EDI.

If you are interested in a list what retailers do and do not provide in EDI and/or web portal, please click here to submit that request.

Since important information may be missing from either the portal or both, it is possible to marry the data from both. We are also looking into ways to automate the extraction of POS data from vendor portals, as we have done with their EDI.

Some or our clients have asked for the ability to enter Out the Door Dollars themselves. So far we have resisted this idea as we feel it to be dangerous. Any amount entered would be an estimate or guess or based on a survey of a limited number of doors. If this number is off and the vendor bases a discussion on it, they could jeopardize their credibility with their retail partner thus defeating the whole purpose of such analysis.

What do you think?

Please let us know.

The dollar value of unexploited data ranges from zero through the negative. A business that ignores information will not grow. It is essential to recognize, prioritize and organize data – only then can it be monetized.

What is astonishing is just how much financial return can be extracted from all those bytes of information. The cash value of data is a geometric multiplier upon the effort that was put into accessing and processing it.  A major toy maker can attest to that:  their $11,000 investment in Retail Analytic consulting generated $250,000 of new revenue in less than five months.

Monetize inventory. Business Intelligence software provided a home textile company with a detailed view of store-level inventory. The manufacturer was stunned to see how under planned the program was. The supplier collaborated with the buyer to write a $1,000,000 reorder within the first two weeks of the program.

Monetize replenishment. A frame manufacturer used EDI 852 to expose a flaw in a 1,000 plus store chain’s replenishment system. Processing the data alerted the supplier that 200 doors were sold out. When presented with this information, the buyer responded by placing a $200,000 reorder.

Monetize shipping. A large retailer experimented with Retail Analysis software. POS tracking, store ranking, and mapping immediately identified flaws in shipping procedures. As a result, the retailer saved over $1,000,000 in freight costs.

Monetize demographics. A home textile maker made their first-ever demographic study. The results were so compelling that they convinced a major chain buyer to test a new program. That program has become a $40,000,000 per year business.

Data strategy is more than a buzz word – it is the mandate of the information age. No business can afford to ignore that data is a valuable asset. No business can afford to tarry when the value of information has a shelf-life. No business can afford to neglect that data must be processed into actionable tools. And no business can afford to sacrifice growth in exchange for indolence and ignorance. Realize, Prioritize, Organize, Monetize – whatever else might be said on the subject of data strategy is only commentary.

A business must begin with its core: this is what we do. Clarity of purpose is essential. Yet, to provide a superlative product or service is not all that is required for a business to survive and to grow.

Inevitably, a business develops supplementary processes such as management, billing, and marketing. The auxiliary functions must be systemized – or chaos is sure to follow. It is essential to conceptualize those procedures as part the core.

In the Information Age, data is a supplementary process that demands to be integrated into the core. It is not that data is modern; rather, that the access to that information is now so readily available. The business that disregards data disarms itself as a competitor.

POS data is a compelling example of both availability and competitive necessity. The point of service is the front line in the arena of retail combat. EDI 852 is a direct dispatch from the war zone, where competition is fierce.  Retail battles are won as much by intelligence as they are by quality of product.

Once this information is accessed, it must be harnessed into actionable form. Retail Analysis and Demand Planning integrate EDI 852 data into the core of a business. These essential disciplines process raw intelligence into reports that track sales and inventory by SKU and by location.

Organize your data and you will know which stores are sold out – or have inventory that is not selling. You will be able to forecast; to determine replenishment quantities on the store level; to compare color and size ratios; and to identify the demographic and geographic characteristics that impact performance. You will enable the buyer to galvanize your business – and take your business to the next level.

A supplier who organizes EDI 852 data becomes an invaluable resource to a buyer. The flow of data via Retail Analytic and Demand Planning reports from supplier to retailer creates a consistent awareness that is essential to your success. Business Intelligence is the solution to the painful margin guarantees that too often come due at the end of a season.

• The White Star Line knew the location of an iceberg field in the North Atlantic on the night of April 14, 1912. Yet, in the name of saving time, the Titanic was ordered to cruise through that perilous area. The result: 1517 people died.
• The Soviet Union had excellent intelligence networks that detected the imminent German invasion of 1941 – and successfully transmitted that information to Stalin. Yet Stalin did not act. The result: tens of millions died.
• In the early 1980’s, Warner Communications knew that its subsidiary Atari would face crippling product returns. Yet the company was not proactive. The result: Warner Communications’ stock price dropped precipitously and the company was vulnerable to take-over.

In each of these cases, a willful ignorance was at work. What is particularly tragic is that the data delivery systems were in place – and they worked effectively. The losses were unnecessary. And the survivors of these debacles must have been particularly dishonored to have gone to so much trouble to establish the systems that they then disregarded. It is often an aspect of the human character to do the exact opposite of what is in our best interests.

Granted, as suppliers and retailers we do not face literal life-or-death situations. However, we do operate in an arena in which our sales and inventory data in various forms including EDI 852 can make, or break, our business. So it is necessary to conceptualize POS data as the life blood of your business. Design a Data Strategy to prioritize Retail Analytics as you would cash flow – because it is cash flow. In a buyer’s market, a supplier can utilize Business Intelligence to unleash revenue and savings that were once hidden in plain sight.

What is your Data Strategy? Step one: Realize.

We all agree that “information is power”. The statement has become axiomatic, even cliché.  This means we don’t question whether or not information is power. This means it isn’t on our minds – when it must always be on our minds. We live in the “Information Age” which, by definition, is constantly evolving. We must evolve with it.

Yes: information is power. And data is information. But, data is only raw information – unformed potential, waiting to be processed like a natural resource.

The exponential growth of technology allows us to acquire data automatically, without effort. We acquire so much data that too often it goes to waste. Data is an asset that can be as valuable – or even more valuable – than our traditional concept of assets.

As an asset, data depreciates in value. That depreciation is not tangible as a tax deduction, and should not be left to chance. Data can transmute from invaluable to worthless in an instant – and cause a staggering chain reaction of loss.

A Data Strategy is the awareness, the conceptualization, the structuring and the implementation of how to translate data into useful information. Each aspect of that definition must be addressed – or the strategy is flawed. In the Information Age, a Data Strategy is an essential tool for any business.

The first step in Data Strategy is to realize the urgent value of data. For many suppliers of retail chains, EDI 852 data is consistently available while some retailers offer web portals with data available in real time. That is a direct line of communication from the POS. A supplier can continually monitor every item as it sells – or doesn’t sell. To neglect this discipline is to invite failure.

Data is the fuel that powers the tool of Business Intelligence. This mechanism allows a retailer and supplier to process the relevant data, to forecast, and to put that information to use. Before one can take these essential steps, it is necessary to realize that without Retail Analytics both retailer and supplier are resigning their future to the whims of the marketplace.

A top 5 retailer has just committed to our first “non-retail analytic” business intelligence solution. While we cannot share all the details, what we can tell you is it involves tools to gather data from a variety of sources to enable 50+ users to analyze, monitor, report and make business decisions to drive a critical part of their business, freeing them from using Excel to compensate for the gaps in their current systems. Visibility will run to the EVP, Director level.

Because of our strong background in data management and building state of the art software tools, we can now offer different BI solutions to other companies in the US and abroad as well. These solutions lie outside our usual retail analytic offerings.

As such, we are very excited and proud of these opportunities and eager to grow this side of our business.

Are you sharing similar pain points? The new world of BI software offers the ability to automatically derive meaningful Key Performance Indicators from your existing systems.

First, it can take some time and some effort to get that accomplished correctly. Most retail analytic software like ours wants the raw edi document. Many VANs and trading partner integration centers want to convert it. Also one needs to be sure he or she is requesting door-level (not corporate level) and the right frequency (weekly vs. daily). If the retailer provides on-hand, in-transit, or on-order information only upon request, one may need to request that. Ditto with the retail dollars (the out-the-door price). Also one can save money if he or she requests current items only. Finally one needs to be sure all divisions are turned on. We recently experienced a situation where our client had half the data they were expecting. They then realized two different divisions of that company were technically selling into that department.

Worse still, almost always you cannot go back in time. Few if any retailers offer back copies of that document. For that reason we encourage prospects to turn on that document while they are evaluating direction and solutions. Most solutions are looking for the same data source: A weekly, raw, door level document. The purpose of turning on the document early is to build history.

Also, some sort of item description file is needed to cross-reference it against the UPC or other unique identifier in the EDI 852 so that when the reporting is run, it offers the description, the color and size, and other pertinent descriptive item info. Item description can be derived from an extract from an ERP system or through a Partner catalogue.

Are you working with the 852 documents? What challenges do you face?

Please let us know.

Delta Galil is using our software to help their retail partners study sales at a deeper level and to improve the accuracy of their wholesale inventory forecasting.

Check out his article…

 http://blog.softwareadvice.com/articles/retail/importance-of-data-collection-at-the-point-of-sale-1121611/