Retailers and manufacturers are trying several new technologies to form electronic connections to each other, including data synchronization and RFID. But for some retailers, a more mature technology, the Web-based vendor extranet, or portal, remains the communication vehicle of choice.

Portals have proved themselves to be versatile instruments, allowing suppliers to get new products to market in the quickest time possible and to “see” products at any point in the supply chain, minimizing out-of stocks.

“It's a community-building relationship tool that lets both sides more effectively communicate key business data quickly and efficiently,” said Patrick Walsh, vice president of industry and trade development for the Food Marketing Institute, Arlington, Va.

Other benefits, sources said, include increased warehouse and store-level inventory turns; enhanced food safety operations; swift transfer of products from store to store; and better replenishment and forecast planning with suppliers.

Portals are catching on across a broad range of retailers. “It used to be just the highest-volume companies doing this, but now leading regional chains are also developing portal/extranets and/or licensing portal content applications,” said Jim Hertel, a partner in the Barrington, Ill.-based consultant Willard Bishop. “It's become a competitive necessity in the sense that retailers are now competing with each other for supplier resources.”

Some portals, such as Wal-Mart's Retail Link — the granddaddy of retail portals — and Target's Partners Online, are “extensible,” said Lora Cecere, a research director for Boston-based AMR Research. This means data can not only be viewed by suppliers and other partners outside the company, but can be imported into the outside partners' systems and used by them to make business decisions.

Having an extensible vendor portal/extranet, said Cecere, can, among other things, significantly decrease the amount of time it takes for store-level point-of-sale data to reach suppliers. “Instead of waiting two weeks, suppliers can see what's being pulled from the store daily and respond immediately to the replenishment needs of the shelf,” she noted.

Portals can also be used to support data synchronization, though some retailers believe portals will ultimately be replaced in part or completely by data synchronization,