Rod Street & Kevin Houston from IBM talked about the concept of ‘clever data’ at Summit 2006
The world’s top retailers are aggressively expanding across stores, formats and categories, changing the industry. By 2010, they could have aggregate sales of over US$1 trillion. Accelerated consolidation in traditional retail channels has given trade customers immense bargaining power and huge influence over CPG companies.
Power is not dependent on size alone, but also on information. The CPG industry is an information-based one and the companies therein are waking up to the need to leverage this to understand their business and categories better than the retailers.
Knowing something your retailer doesn’t is key to long term success. Structuring and leveraging information around the key questions you need to answer is the gateway to solving a host of problems, and realising great benefits such as speed, accuracy, consistency, understanding and insight. All of this adds up to a sustainable competitive advantage.
Gaining a greater understanding of your business and consumers should be easy, as the volume of data and information available continues to grow. But the explosion in data sources is not being matched by the industry’s ability to leverage it for innovation and insight. All too often this is because, whilst rich sources of internal and external data are available, they are not accessible. Today, the typical company spends 80 per cent of the time on integrating data rather than developing insights.
Insights and related data analytics have been identified as a specific barrier to improved revenue growth and profitability. The key is to create ‘clever data’, integrating all your data sources, rather like online price comparison site Kelkoo.
To create this clever data, it is vital to take a strategic view of information. Work with the retailer, focussing on something with mutual benefit such as availability and create your own rule book, defining categories, segments, metrics and attributes.
By focusing on what the customer wants, even if it may sometimes seem counter-productive, Amazon has continued to innovate and grow what is already a true retailing behemoth.