Walmart Point of Sale Data Reporting

If you are a Walmart vendor, you have access to a wealth of data via Retail Link. As a service provider, we work with a lot of Wal-Mart vendors, helping them to analyze the point of sale data made available by Walmart through Retail Link. Sometimes a vendor will ask us “If I have Retail Link, why do I need to hire someone to help me analyze POS data?”

Retail Link provides a method for getting POS data, but as the vendor, you will be responsible for transforming the data and you will need a database to store the data. Both of these are critical to provide for comp week and comp year comparisons which are the basis for accurate and insightful POS analysis. The complexity of building a database to store Retail Link data is more than most vendors want to bite off since it requires hardware, software, and IT skills to accomplish.

What can you do with Retail Link data if you have it stored in a database?
· Analyze SKU/store level sales
· Analyze SKU/store level on hand
· Analyze average unit selling price by SKU/store
· Analyze planogram compliance by verifying on hand and selling at traited and valid stores
· Identify out of stock stores, and even forecast demand based on prior sales
· Create SCRIPT forecasts for your buyer indicating where inventory is needed to maximize sales and avoid out of stocks.
· Group stores into A, B, C categories based on SKU level sales volume.

Walmart buyers expect vendors to use Retail Link data to analyze and manage their SKU activity. If you are not already using the data, of if you are not using it as well as you could be, then you are missing sales opportunities. Don’t wait for your buyer to call you and ask a question you can’t address – start working with the data today.

Retail Sales Performance

The current retail environment is a subject of much discussion. The Accelerated Analytics team analyzes over 7 million units sold at over 650 retailers each week for vendors of consumer products and fashion items. For the last several weeks, we have been seeing consistent week over week growth in all three categories. Here is a summary provided to members of our retail industry community for the week ending November 14, 2009. 

Total unit sales volume as 7.29 million units sold sales week across all categories. Week over week and comp year sales performance remain very consistent with current year comp weeks showing modest growth. CPG Non Durables continue to show year over year growth while CPG durables and fashion categories continue to show year over year decline.

Home Depot EDI 852 Reporting

If you are a Home Depot vendor, you are eligible to receive product sales activity and inventory data via EDI 852 from Home Depot.

The Home Depot EDI 852 document will contain SKU/UPC level units sold, units on hand, and dollars sold for every store where your products are sold. The files are sent one time per week, summarizing the prior week’s activity.

What can you do with EDI 852 from Home Depot?
· Analyze SKU/store level sales
· Analyze SKU/store level on hand
· Analyze average unit selling price by SKU/store
· Analyze plan-o-gram compliance by verifying on hand and selling at planned stores
· Identify out of stock stores, and even forecast demand based on prior sales
· Group stores into A, B, C categories based on SKU level sales volume.

Home Depot merchandisers expect vendors to receive and use EDI 852 data to analyze and manage their SKU activity. If you are not already using the data, of if you are not using it as well as you could be, then you are missing sales opportunities. Don’t wait for your merchandiser to call you and ask a question you can’t address – start working with the data today.

Learn more about what your organization can do with Home Depot EDI 852 click here

Retail Point of Sale Analysis How To Guides

Analyzing point of sale data can be a daunting task for an analyst, especially when there is very little real world training available. That is why the Accelerated Analytics team has written four “how to” guides that share the secrets we use to analyze over 69,000,000 unit sales per week. Now you can get real world insight, available for download right to your desktop!

The retail data analysis “how to” guides provide category management and business analysts with a practical easy to follow approach for narrowing down large volumes of EDI 852 and retail point of sale data into manageable, actionable reports. Many vendors to Wal-Mart with Retail Link or vendors receiving EDI 852 are have a wealth of data available to them, but analyzing the data on a weekly basis can be challenging. These guides provide insights the Accelerated Analytics team uses to turn the data into improved sales and in-stocks.

If you are a vendor to Home Depot, Wal-Mart, Lowe’s, or any other major retailer, these guides can help you be more successful.

The series contains four “how to” guides with simple step-by-step processes for completing a:
· SKU Analysis
· Store Analysis
· Out of Stock Analysis
· SKU Forecast

Learn more and get your copy here:
http://www.acceleratedanalytics.com/download-whitepapers/

How Much Are Out-of-Stocks Costing You?

A recent RIS article titled “How Much Are Out-of-Stocks Costing You? Much More Than You Might Think”, by Greg Buzek, provides more evidence that retail out of stocks are costing vendors huge lost sales. Buzek quantifies the scope of the loss; “A retailer that invested in completely fixing its out-of-stock problem would gain a solid competitive edge. The average retailer could increase same store sales 3.7% by converting all perceived out-of-stocks into transactions. Specialty soft goods could have the biggest potential win: solving out-of-stocks would boost their same-store sales 7.1%, while department stores would see a 4.2% jump.”

The good news is we have seen dramatic improvements in in-stock performance by active store and item level analysis.  The methodology is pretty straightforward:

1. Determine the lead time from order to product arriving at a store.  Let’s say this averages 2 weeks.  This is your minimum on hand weeks supply to avoid a stock out.
2. Next calculate the average weekly sales velocity for each item, and each store.  Yes, you must know the average sales velocity for each peg or shelf position.
3. Calculate the weeks supply on hand for each item and store by dividing the current on hand inventory by the average sales velocity.
4. Filter the results to show only those items with less than the 2 weeks supply on hand.  These are the stores you need to make sure place an order immediately to avoid a stock out.

This type of analysis is not hard to do, but if you don’t have the proper tools, it can be very time consuming.  But it’s well worth the effort if you can improve your in stock performance by even 2%, you stand to gain significant sales.

Next Article: Increasing Sales By Managing Out of Stock Inventory

Supply Chain Metrics

We recently found this website which includes a lot of very good information on calculating various supply chain metrics including:

• Back-order reporting
• Cycle-time
• DPMO
• Fill rate
• Inventory turns
• On time shipping
• Perfect order
• Performance to promise

Handling On-hand inventory

While EDI 852 is set up to report on-hand inventory quantities, many vendors come to realize the quality of the data reported can be suspect at best.  In this case there are strategies to handle the missing or poor quality data.  One such strategy is to use the shipping quantity and then subtract reported EDI 852 product sales to arrive at a 'calculated on-hand.'  This method has some limitations, but over time this can become an effective decision making tool.  Our Accelerated Analytics service provides the vendor with a simple and effective means to accomplish this data matching.  By incorporating purchase order and shipping data, we are able to synthesize the on-hand value.

Don't allow the on-hand to become a barrier to using the EDI 852 data. Reporting and tracking sales alone is valuable, and the on-hand issues can be dealt with by using simple business rules.

Making the most of POS data analysis

The Accelerated Analytics team is hosting an event in New York City on Feb 21.   If you are responsible for using POS data from your retail customers this is a must attend event.

NRF Show 2007

The Accelerated Analytics team had the opportunity to attend "The Big Show" today in New York City.  If  you are not familiar with the show, this is the annual trade exposition sponsored by the National Retail Federation.  Overall, the show is a good source of industry news and provides an opportunity to spend time learning about new technologies and vendors in the market.  The show floor can be a bit overwhelming, with thousands of vendors.  This year, we were struck by the number of empty booth spaces as compared to prior years.  It would seem the declining attendee rate has impacted the NRF like most organizations, although this is still a very big show.   It is very hard to gauge who is attending, but we had the opportunity to talk with representatives from Gap, Jo-Ann Stores, The Andersons, Wal-Mart, and saw many other retailers, so it seems the usual suspects are in attendance.  It does seem most of the attendees are part of the IT, store operations, or supply chain teams.  One conversation we had with a fairly good sized retailer regarding their supply chain vendor collaboration was a bit surprising.  This vendor told us they make weekly product activity data available to their suppliers, but only a handful really use the information.  This was a surprise because, as we work with vendors, most tell us the opposite is true - they request the data, but their retail partners are not filling that request.  In fact, something in between is probably true.  Our experience tells us retailers are generally making the data available, but in many cases, not in the format the vendor would like to receive, so they are challenged to do much with it.  This is unfortunate since there is much that can be done with the data.  Hopefully, more productive programs will be put in place in 2007.

If you are in NYC and have the opportunity to attend the show, make time to visit the Microsoft booth. (full disclosure, we are a MSFT partner)  Their booth is huge and filled with solutions for every aspect of a retail operation.  The representatives working the booth are overly technical, but if you ask questions about their client work, they can provide some very interesting tid-bits of information.  We especially enjoyed our conversation with the Project Real team.  If you want to learn about how a huge data warehouse is deployed at a real customer, you need to check that out.

 We dropped our cards into most of the fishbowls we found, so maybe we will win something:)

Using Sell-Thru for decision making

Sell-Thru is a key performance indicator for vendors and retailers alike.  Sell-Thru allows one to understand the velocity with which inventory is being consumed as it relates to sales.  Because sell-thru is a leading indicator, it is also very useful for predictive analysis.

When calculating sell-thru, careful consideration should be given to how the formula is constructed.  As with any business metric, there is more than one possible answer, but only one is correct in terms of meeting the business user's needs.

So ask yourself: what is the difference between calculating sell-thru using all available weeks of sales and inventory data as opposed to using the most recent 4 weeks of data?  Both methods are valid, although they may produce very different results.  The first method will tend to flatten out fluctuations due to promotions.  This is useful if the item is on replenishment and operates within established min/max guidelines.  The second method of calculating sell-thru, using the most recent 4 weeks of data, tends to provide a rolling snapshot of performance.  This is very useful if an item is  highly promoted and one wants to understand the impact of lift within a given promotional window.

Both methods are correct, but one will be more useful than the other to business decision makers at your organization.  Here are three best practices to make sure your team arrives at the most useful method:
1)  Have simple design sessions with business users to write out on a whiteboard all calculations.
2)  Discuss if the calculation supports the intended business decision.
3)  Adjust the formula accordingly.
4)  Identify low, middle, and upper performance conditions for each metric so exception dashboards can be created.
5)  Document your work in a place all team members can access so there is no confusion on how the calculation is performed, or how the performance conditions are aligned.

Collaboration Key To Survival

Press enquiriesFor Economist Intelligence Unit: Joanne McKenna, Press Liaison: +44 (0)20 7576 8188 joannemckenna@eiu.com 

 For immediate release:  Wednesday, November 15th 2006 
Collaborative partnerships will be key to corporate survival, reveals a new survey from the Economist Intelligence Unit

Companies believe collaboration with other companies has become critical to their long-term survival, according to new research from the Economist Intelligence Unit. More than half of the 187 executives polled for this report say collaboration will either form an important part of their firm’s competitive advantage or will actually be central to its survival over the next three years. In addition, 51% say that they have changed their business model over the past three years to take greater advantage of collaborative partnerships. Key areas of collaboration include sharing supply chain data, establishing sales partnerships to tap fast-growing markets, and collaborating on research and development. In each of these areas, collaborative partnerships are delivering significant rewards: 28% of respondents say their biggest collaborative ventures have delivered either more or much more value than expected, compared with 11% who say they have not. 

“What this research reveals is that companies of all sizes are engaging in, and benefiting from, collaboration with other organisations, either locally or in countries where they may have no direct presence whatsoever,” said James Watson, the editor of the report. “What is striking is that a significant minority of these companies acknowledge that they couldn’t even exist if it wasn’t for the collaborative relationships they have engaged in.”   These findings are published today in Companies without borders: collaborating to compete, a report from the Economist Intelligence Unit, sponsored by BT.  Other key findings of the report include:

Collaborating with other firms is now the norm for nearly all businesses. The majority of companies (64%) engage with up to 10 partners, although some have established agreements with more than 100. And nearly all firms expect the average number of partnerships they have to rise over the next three years.

Most collaboration centres on sales and marketing. Firms collaborate for a number of reasons: to provide products they can’t deliver alone, to keep up with competitors or to expand their global reach, to mention just a few. These partnerships are typically being driven by the sales and marketing departments.  

The biggest challenge involves finding suitable partners. About one-third of executives polled for this report say the biggest impediment to collaboration is simply being able to find an appropriate partner. And when they do, overcoming any cultural clashes between the two organisations is a major concern, along with more practical issues, such as getting system integration right or dealing with data security concerns.

Successful collaboration hinges primarily on people skills. Making partnerships work relies more on people than anything else. Survey respondents identified the skills of the personnel assigned to a relationship as the single most critical factor for successfully managing the partnership.  

Andy Green, CEO BT Global Services, said: “This research shows the increasing importance of collaborating within and between organisations. The digital networked economy is enabling companies to create new business models, utilise global resources and work in real time with people anywhere in the world as if they were in the office next door. This erosion of the traditional barriers of time and distance means that the ability to partner and work effectively is more important than ever to achieve success in the global competitive environment.” 

Companies without borders: collaborating to compete is available, free of charge, at: http://www.eiu.com/CompaniesWithoutBorders

Noteworthy Trade Promotion Event

If your organization is involved in trade promotion the Accelerated Analytics team highly recommends this event.

The next TPMA conference “The Financial Impact of Trade Promotion Management” will be held February 11-13 at the Renaissance Vinoy, St. Petersburg, Florida. View agenda at www.tpmaww.com,  Register Here.  For hotel reservations, contact the Renaissance Vinoy Hotel at 888-303-4430. Contact Mike Kantor at 646-442-3703, or mkantor@tpcww.com with questions.

November & December Executive Moves

Home Depot: reported Frank Blake, currently VP of Business Development, was named to Vice Chairman.
Circuit City reported Michael Jones resigned as CIO.  William McCorey was named as his replacement.
Abercrombie & Fitch said Thomas Mendenhall resigned as General Manager.
Family Dollar appointed Michael Laurenti to VP Information Technology.
J.C. Penney Co. named Thomas Nealon to VP and CIO.
Gottschalks, Inc. named Robinsons-May as VP Finance and CAO.

Dashboards Make POS Data Analysis Easy

If you are selling products through a retail channel and your retail customers are willing to share POS data, you have a great opportunity to increase your sales and optimize inventory - if you can create an effective solution to manage a large amount of data and distill it into smart business decisions.  This is where a dashboard can be a very effective tool. 

In a recent article, Steve Pugh of Howard Products discusses how he is using dashboards to monitor sales at several thousand retail stores so he can direct buyers on the most effective purchasing strategies. 

Here is an exerpt from the article...

Dashboards can be home-grown, using the graphing and charting capabilities of Excel spreadsheets, for example. There also are specialized software applications. Howard Products, a manufacturer of wood care products, recently contracted with Accelerated Analytics to install Accelerated Analytics, a Web-based dashboard application to monitor purchase order and sales data, in addition to inventories.

The process "allows us to quickly come up with exceptions reports showing when our customers' inventory levels are too low," said Steve Pugh, VP at Howard Products. Pugh said he can immediately identify quick-selling stores or regions, or even individual products.

"I did that just yesterday with a customer we rolled out nationwide," Pugh said. "I can just hit a button and dump sales figures to a spreadsheet with colors, then direct it to the buyer saying we can do one blanket order to bring him up to speed."

At Howard Products, there are different dashboards for different folks; generalized big-picture versions for top executives, team-oriented ones for regions, and job-specific ones for individual sales reps.

You can read the entire article here

Trade Promotion at Fresh Express

This is an expert from a very good article written by John Walsh in CPGmatters.  

Emphasizing that trade promotion management (TPM) is a crucial component of any consumer goods company's strategy, a significant amount of time and due diligence must go into the process of selecting a TPM vendor and system, said Kiera Benidettino, Director of Trade Promotions for Fresh Express, the nation's largest provider of packaged salads.
Speaking at the recent Trade Promotion Management Associates (TPMA) Conference in Chicago, she discussed why an effective TPM system is vital and explained the process of choosing the right system.

Concerning Fresh Express, she stated promotional lifts put "significant strain on our supply chain operations," since lettuce is highly perishable and inventory cannot be stockpiled.  The shelf life of Fresh Express' products is typically 15-20 days.  "This means our supply chain is measured in hours," she explained.  So, for her company, a good TPM system must support a quick and eficient supply chain, which requires a "tremendous amount of coordination."

Benidettino noted an effective TPM system is vital to consumer packaged goods companies:

• Spending Magnitude -- TPM is the Number 1 or 2 SG&A expense on a CPG company's P&L.  In addition, expenses  have increased more than 12% annually over the past six years to the point where spending is, on average, 14% - 17% of   gross sales.

• Questionable Results -- Less than 50% of spending reaches the consumer and manufacturer, and retailer margins continue to decline.
  

• Government Regulations -- Sarbanes-Oxley mandates tremendous responsibility for internal controls.  In addition,  SEC and FASB regulations significantly impact forward buying practices, financial reporting and slotting fees.  FASB regulations require all expenditures be identifiable, so a TPM system must capture specifics on trade investment in real time.
  

For Fresh Express, effective TPM matters because promotional lifts impact its supply chain.  "The decision of how much to harvest each day is dependent upon results at the stores, so our biggest challenge in TPM is connecting promotions with our supply chain," Benidettino said.  Its TPM system must support forecast accuracy to ensure service and product quality.  "Therefore," she explained, "when taking steps to find the right TPM solution and provider 'you must know our company' including trade fund management capacity, IT resources and budget capabilities." 

Newsletter launch

The Accelerated Analytics team is launching a newsletter for POS data analysis best practices and vendor compliance news.  Take a moment and sign-up here.  Our first issue will be sent out in a few short weeks with the lead article summarizing our research on the "POS Data Analysis Maturity Model."

Trade Promotion Dollar ROI

If there is one problem common to vendors selling products through a retail channel, it is getting a handle on the ROI of trade promotion dollars.  Unless you are responsible for spending and managing these funds, it's hard to appreciate the complexity of this problem.  But the reality is, as much as 30% of sales are spent on trade promotion.  That is a lot of money to pour into a program without the ability to track effectiveness.

So what's a vendor to do?  Unfortunalty, there is not a simple solution, but one tool that seems to work is carefully monitoring POS data available from your retail customers.  By looking at weekly unit sales for promoted items, it is possible to calculate the lift associated with your expenditures.  As we have chronicled on this blog, that brings many challenges also.

As you develop the capability to work with POS data, remember these best practices:

1) Working the data should be the smallest portion of your effort.  If you find yourself spending 80% of your time building reports, you've got a problem.  Seek a better solution.

2)  Define your business objectives first, then build exception based reports to isolate top performers and laggards.  If you expect a program to create a 15% increase in sales, then use software to compare week over week unit sales and automatically color in red those SKU's that are below expectations.

3)  Measure and manage.  Much of the decision making on how trade promotion dollars are spent is done based on gut feel and buyer feedback.  Instead, learn to track the unit sales and then trust your numbers and make impartial decisions.

The EDI 852 Dilemma

In the past week, the Accelerated Analytics team has been contacted by 6 vendors looking for a solution to their EDI 852 data analysis problem.  Simply put, their retail customers are sending weekly sales and invenotory data, but they are challenged on how to translate the data and turn it into smart business decisions.  If you are reading this post and nodding your head, you're in good company.  These vendors range from small to very large and they all have the same issues.

Don't allow the challenges to divert  your attention away from this important data.  If you seek out a tool that can reduce the dirty data work, the business value will be significant.   Focus on what business questions you need answered.  A good place to start is to identify what minimum on-hand you need at each store to ensure your desired sell-thru is met.  Then create simple reports that draw out the problem stores and focus your attention on working with the buyers to make sure inventory is manged properly.

Accelerated Analytics Forms Strategic Alliance

Accelerated Analytics, Blacks Retail Analysis Announce Strategic Alliance To Provide Clients with Expert Merchandising & Forecasting Services

AKRON, OH & SAN FRANCISCO, CA, OCT. 24, 2006 - Accelerated Analytics point of sale reporting and inventory management service, is pleased to announced a strategic alliance with consulting firm Blacks Retail Analysis, offering clients expert advice on merchandising and forecasting.

Under the partnership, customers using the Accelerated Analytics service to share and analyze sales and inventory data, will be offered valuable insight from Black's retail consultants on how to increase sales and improve margins through smart category management.

"I'm very pleased to form this strategic alliance with Blacks, because it further extends the value of Accelerated Analytic's service by adding guided analytics and expert merchandising recommendations onto our existing data and reporting tools," said Accelerated Analytics & CEO Chad Symens. 

By leveraging Black's years of retail experience, the alliance will also help vendors better understand the needs of thier retail customers.

"Blacks is excited about this opportunity to expand our range of services and improve the level of understanding between vendors and retailers using Accelerated's service," said Blacks Senior Consultant Steve Pruitt.

For more information on the partnership between Accelerated Analytics and Blacks Retail Analysis contact:

Scarlet Pruitt Consultant Blacks Retail Analysis

831-521-4203

www.blacksretail.com

scarlet@blksretail.com

Wal-Mart Invincible?

There was an interesting article in the WSJ yesterday titled: "Wal-Mart's Fashion Faux Pas: Soft Apparel Sales."  We often hear some version of the now familiar old refrain, Wal-Mart is killing everybody... don't even try to compete with them.   We hear this from all levels of management at both large and small companies.  There seems to be a general sense of paranoia when it comes to Wal-Mart.  Wal-Mart is a tough competitor for sure, and overall a very well run company, but they are not infallible or invincible.  They often make mistakes and they are also not very adept at serving certain market segments.

Here are some notes from the WSJ article.  Same store sales at Wal-Mart rose only 1.3% in September, and apparel sales were a big reason why.  And this is despite a year long push of advertising and promotion, and even opening a New York City fashion office.  And lest you think this is due to a slow retail month take note that the Lazard Retail Index for September rose 8.8%.   Meanwhile, Target continues to pound away at Wal-Mart, beating them on same store sales 12 of the past 13 months.

Some interesting competitive points to ponder....Wal-Mart store managers are tightly managing labor just to run the store, so implementing a new display often does not get a high priority.  Company merchandisers often do not have the clout to push change back up to the corporate level.  Don't make the mistake of thinking the simple act of opening an office in the fashion district will give you the insight you need.  The Wal-Mart brand is equated with convenience and value, not necessarily quality or fashion.  Wal-Mart is spending significant money to update 1,800 of their 3,800 stores, suggesting they believe the older stores do not perform as well.

 If you are competing with Wal-Mart, and isn't everyone, spend some time considering your position in the market as compared to Wal-Mart.  If you look hard enough you are sure to find some holes, and those are your big opportunities.  In fact, two retailers I've spoken to this week purposely seek out Wal-Mart locations when selecting new sites to open a new store.  Why?  Because Wal-Mart creates  a lot of foot traffic and they want to be right in the middle of it.  That's good competitive and strategic analysis... and its paying off!