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September 2012

Mobile internet fuels demand for supplier collaboration

Joachim Pinhammer Senior Retail Analyst

Consumers today are shopping via multiple channels: in stores, online and from their mobiles. Increasingly, they are using digital media to inform their buying decisions. They look up product information on retailers and suppliers web pages, read reviews on consumer portals or social media and compare prices online. Most of the facts consumers are looking for such as features, ingredients and source of the product - are freely available at the shoppers fingertips. But is this information really trustworthy? At present, there is every chance some of the data retrieved will be incomplete, incorrect and outdated or may come from dubious sources.

Consumers retrieving product information via their smartphones expect trustworthy data.

Data quality is becoming ever more of a challenge for retailers. They need to feed their systems with consistent product information across all channels and along the supply chain. And they need more data each day if they want to communicate with customers at a multitude of touch points: at point of sale, at home - through print media, websites as well as social media and increasingly on the move, via mobile devices such as smartphones and tablet PCs. The data required for all this far exceeds the scope of traditional master data, and now includes marketing information, images and multimedia files. The vexed question of enhanced product information for consumers in the digital world was one of the most discussed topics in Wiesbaden at last weeks ECR Tag 2012 conference, the major networking event for retailer and supplier collaboration in the German-speaking countries. GS1 Germany, which hosted the conference, used the occasion to make an announcement designed to support trading partners in their efforts to manage product data from the supply chain to the consumer.

Seeking standardisation
Merging its recently acquired product master data pool SA2 Worldsync with 1Sync, a similar tool operated by its US counterpart, the standardisation body has created the worlds largest provider of global data synchronisation network services in the industry. The new platform, called 1WorldSync serves 15,000 customers in 40 countries and is certified for the GS1 Global Data Synchronisation Network (GDSN).

Implications
The mobile internet and increasing consumer demand for reliable product information urges retailers and their suppliers to collaborate in developing a unified and trusted source of data. Global standardisation body GS1 and its Global Data Synchronisation Network GDSN are supporting both retailers and FMCG companies in their efforts to communicate master data electronically in a standardised way. The worlds largest provider of global data synchronisation services in the industry, 1WorldSync - resulting from the merger of SA2 WorldSync and 1Sync - is set to help not only big players but also the large number of small and medium-sized companies to improve data quality and contribute to a consistent repository.

In a joint press statement, Jrg Pretzel, CEO of GS1 Germany, and Bob Carpenter, CEO of GS1 US, said: Brand owners and other businesses will benefit from this venture as we create a proven leader in the development and implementation of solutions to build a better-informed world. The sharing of product information beyond the traditional business-to-business model has

rapidly become a flashpoint for businesses and 1WorldSync will be at the forefront of this major shift. GS1 US and GS1 Germany will supply equal representation to the 1WorldSync Board of Directors, whose voting members are Carpenter, Pretzel and external directors Otmar Debald, Managing Director, Procter & Gamble Germany; Erich Harsch, Chairman of the Board, dm drugstores; Rodney McMullen, President and Chief Operating Officer at Kroger in the US and Joe Pleasant, Chief Information Officer of the Premier healthcare alliance in the US. 1WorldSyncs CEO is Nihat Arkan, formerly the CEO of SA2 Worldsync. Ulf Adebahr, Chief Information Officer of 1WorldSync told Planet Retail that the new platform will be based on the existing software architecture from SA2 Worldsync. He also underpinned the fact that retailers require more and more additional product information to fulfil the high expectations of an always on consumer. Previously, master data management was mainly focused on the B2B process and information necessary for logistics. 1WorldSyncs strategy is aimed at widening the view. Adebahr calls it B2B2C, creating transparency on a unified platform from business to business to consumer. Jrg Pretzel, CEO of GS1 Germany hosted the ECR Conference 2012 in Wiesbaden.

Slow pace of synchronisation


This approach may well fuel the development of global master data synchronisation through GS1s Global Data Synchronisation Network (GDSN), a network of product master data pools which aims to give all retailers worldwide a single point of access to standardised product information. However, the network is still evolving much too slowly. Moreover, it is limited so far to logistical information on products exchanged between companies. The increasing demand for reliable and consistent digital consumer information will motivate more players to participate in the laborious effort of data synchronisation. To feed the platform with more content, from numerous small and medium-sized suppliers, 1WorldSync chose Brandbank as its partner. Although the UK-based company has many competitors in the market, such as Etilize, Mynetfair and DCI, it has now become something of an exclusive partner for the retail and FMCG industry. This is a step which could be seen as a clever decision for a couple of reasons. Brandbank is an exclusive content provider for Tesco.com and is currently supporting the international roll-out of the UK market leaders online food business. Therefore, Brandbank is amassing images and data relating to a significant proportion of branded goods sold across Europe. In addition to this - and more importantly - the company is offering a service to both retailers and manufacturers where they carry out 360 degree spin photography of physical products sent to them and combine label information from the package

with attribute data such as product dimensions and weight. Whats more, the provider ensures that all the information captured is reviewed and approved by the supplier. Only with services such as these can smaller manufacturers and retailers, with their private labels, participate in a new consistent data repository. This will not only improve the quality of consumer information but also enable communication via new channels: digital screens in stores or virtual shopping walls, as well as smartphones or tablets, all of which rely on image availability and comprehensive product descriptions.

Supplier input essential


Both in the US and Europe, initiatives from major retailers will also encourage the progress of global data synchronisation. US retail heavyweight Kroger has announced it will introduce data synchronisation with suppliers through the GDSN, partnering with the 1WorldSync data pool to implement the facility. The grocer will kick off the programme in October with nine selected product categories before it will be extended to more than 650 categories over the following three years. The US retailer may not have been the first to embrace the GDSN, but now it is really pressing ahead. According to Kroger, it will be doing nothing less than launching the largest IT initiative in the companys history. The programme - dubbed Project Mercury - not only includes the adoption of data synchronisation but also new master data management as well as new merchandising and store applications. Whats more, Kroger will not only use the GDSN to bring a broad array of product attributes into its system but will also ask suppliers to provide additional product characteristics not yet supported in the GDSN. Around 25 of these will be unique to Kroger and some will be categoryspecific. Additionally, the grocer is seeking attributes for mobile and web applications and will ask suppliers to add data such as nutritional components and allergy information to their datasets, a move that will also benefit other users of the network. Synchronising data, Kroger and its suppliers will not only avoid huge piles of paperwork, the grocer will also be able to bring products to market much faster as well as manage item modifications more efficiently. In addition, the retailer and its suppliers will benefit from improved data accuracy, thus avoiding, for instance, logistics and invoicing errors. There is something in it for the customers too - they are likely to face fewer disruptions at the checkout and benefit from more detailed shopping receipts and shelf tags. Finally, the programme will enable the company to improve product tracking for recalls. Kai Barz, Head of Master Data Management at Edeka/Lunar, improved data quality using the 1WorldSync master data pool.

Retailers see the light


At the ECR conference, German grocery retailer Edeka presented its master data management initiative, part of its Lunar project. Edeka is connected to the GDSN, using 1WorldSync as services provider. The move has been driven by an increasing product range - the number of GTINs soared by 40% since 2008 - and a high failure rate of master data from its supplier, averaging at 30%. Kai Barz, Head of Master Data Management at Lunar GmbH, reported that using electronic data interchange and one source of truth, the retailer significantly improved data quality. From 2009 until now, Edeka has increased the number of connected suppliers from 900 to more than 4,000 and doubled product numbers managed on the platform from 200K to over 400K. Competitor Rewe Group stated that, following a two-year-quality initiative for its master data, the retailer also plans to make its systems GDSN-compliant, intending to receive 80% of product data electronically. With large European retailers, such as Metro Group, who have long been taking part in data synchronisation, Edeka and Rewe Group, as well as US giants like Kroger and SuperValu - which also announced significant investment last year on board and pushing forward with data synchronisation, it can be expected that GDSN will now evolve much faster than in the eight years since its launch. Source: Planet Retail

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