ORLANDO, Fla. -- Citing a lack of engagement on the supply and retail sides of general merchandise in the industry's data synchronization effort, the General Merchandise Distributors Council, Colorado Springs, Colo., dedicated one of its business sessions to the topic at this month's GM Marketing Conference here.
Only 33% of the GM suppliers participating in GMDC and 22% of the retailers are active in UCCNet, Lawrenceville, N.J. That is a challenge for part of an industry that has more individual items that change more frequently than others, said Mike Winterbottom, GMDC's vice president, information technology and chief technology officer, and moderator of the event.
"We are rapidly reaching the point where if you decide to stay on the sidelines, your loss of competitive advantage is going to hurt you every time you sit down [with a trading partner]. You are going to be more expensive to do business with relative to all of your competitors," Winterbottom told SN after the session.
"It's time to move forward," said Jerry Lynch, business group manager, Wegmans Food Markets, Rochester, N.Y. "You can't be neutral. You need to make a decision, and the decision is to get on data sync. Data synchronization is built for GM. The grocery side of the business went through the pain of developing this process. We stand to reap the benefits without being on the bleeding edge. This is a great opportunity for GM and HBC."
Data synchronization is the adoption of a common set of global data standards, which suppliers use for their product catalogs, according to a white paper on the topic distributed by the GMDC Educational Foundation, New York, at the session. Suppliers make these catalogs available to retailers in data pools linked to the UCCnet Global Registry. "Doing so allows retailers and suppliers to quickly and accurately communicate product and program information with one another," the paper said.
"This is not about technology," said Dan Wilkinson, vice president of implementation services, UCCnet, speaking at the session. "This is about business process. This is about cleaning up the data within the supply chain and enabling e-commerce."
There is a clear return on investment for retailers and suppliers in synchronizing data, Brad Papietro, eCommerce manager, Wegmans Food Markets, told SN after the session. A recent study by A.T. Kearney, Chicago, which Wegmans participated in, showed that retailers and suppliers can expect to save about $1 million for every $1 billion in company sales. "We expect to at least get that benefit," Papietro said. "It's over 100% ROI."
Wegmans; Supervalu, Minneapolis; Gillette, Boston; and Arden Corp., Southfield, Mich., participated on the GMDC panel because they believe it is in their companies' interest to have competitors join in the data synchronization effort, Papietro said. "We feel that critical mass is really important for retailers and suppliers to make this successful -- one network where we can all communicate in real time, transmitting good data better."
The complexity and the cost of getting involved have gone down significantly since the early days of UCCnet, noted Greg Zwanziger, senior business consultant, Supervalu. Noting the many people who left the session early, Lanny Hoffmeyer, corporate director, wholesale general merchandise, Supervalu, said there were probably more questions at the end of the session than any GMDC study presentation in recent years. "The people who stayed in the room were the people who were interested. ... Shame on those who left. I really believe they missed an opportunity," he said.
The session on data synchronization was "probably the most substantive presentation we've had in a couple of years," said Larry Ishii, general manager, GM/HBC, Unified Western Grocers, Commerce, Calif. Often, the GM and HBC parts of the business do not keep up with some of the other departments, "and this is critically important to us from an efficiency standpoint [and] from a cost standpoint. For manufacturers being able to maximize sales and profitability, for retailers to be able to be more competitive, and maximize sales and profitability, all the way through the supply chain, to retail and the consumer -- this is very, very important to our business," he said.
David McConnell, president and chief executive officer, GMDC, said the association will continue to emphasize data synchronization. "We are committed to this. We think it is important to every trade class represented at the conference. Certainly every manufacturer that wants to play in the supermarket industry in the future in general merchandise better be doing it, or thinking about doing it immediately. This is the short-term future, not the long-term future," he said.
