Retailers, Suppliers Debate Need to Filter Product Data

ELLIOT ZWIEBACH

LAS VEGAS — Some retailers do not want wholesalers or vendors to filter out new-product information or edit product data before they have had a chance to evaluate it for themselves, said a presenter at the National Grocers Association annual convention here.

“I don't want anyone filtering out information because they assume I won't be interested,” Ron Rehkopf, president and chief executive officer of Rehkopf Family Food Stores, Texarkana, Texas, told a workshop audience at the show.

“If 1,000 new products come out this week, I want to look at them, because my competitors are looking at them. Retailers have got to accept responsibility for looking at those items.”

When the workshop moderator asked the audience how many wanted their suppliers to edit product information, no hands were raised.

Rehkopf said he gets some product information from emails sent to him by suppliers, “though a lot of it is garbage. So retailers have to discipline themselves to go through all that email, and it helps to assign one person to do it so you don't miss any opportunities,” he said.

“But we need manufacturers to get away from using store volume as the determining factor in what kind of information we get, in favor of a more multi-tiered approach. What manufacturers must recognize is we look at what the competition is doing, and we even carry some items the biggest chain in town doesn't carry, so we need to see what each product is, he continued. “But often manufacturers lose out if they try to categorize sales by store size alone.”

PRIORITIZING DATA

While commending Reh-kopf's attitude, panelist Steve Scholtes, manager of industry affairs for North America at Procter & Gamble Co., Cincinnati, said it may not be practicable for retailers to see all the data that is available.

“With 90,000 new SKUs a year, someone has to indicate which products are first-tier, and that goes back to trust,” he explained. “It's up to the manufacturer to tell wholesalers which new items are important, and then it's up to the wholesalers to get that information to retailers.

“And the manufacturer must tier those new items first, second and third so the retailer understands which items have the most volume opportunities,” Scholtes continued. “It's up to the manufacturer to prioritize which new items will be best, because with 90,000 new items a year, that's a lot of information for a retailer to go through and digest.”

According to panelist Steve Heggelke, senior vice president, merchandising and procurement, for Bozzuto's, Cheshire, Conn., retailers can use their category managers to sift through the raft of new-product data. “The retailer can start the process by segregating what's really new from new formulas, sizes or packaging changes,” he said. “At Bozzuto's we consider variety the most important factor in what we stock. Among all those new items are some we don't know about — so as long as we can get the right information from somewhere, we will use that to influence our decisions.”

COMMUNICATION IS KEY

Scholtes said it's important for CPG companies to improve the lines of communication with their customers. “At P&G we've been using the Internet for years to enhance coverage of our products at the wholesale level, and we think that's an effective way to disseminate information.”

An attempt by P&G last summer to dispense new-product information via Web-casts was less successful, he noted. “The idea was for experts to talk about three of our biggest initiatives on a Webcast, but we didn't get a lot of attendance,” he said.

Heggelke said Bozzuto's has also struggled with Internet communications, “because some independent retailers embrace that technology and others don't,” he said. “But at the end of the day, it's the department managers who decide what we will do when they place orders, and we need to make sure they get the right information.”

Another problem discussed by the panel involved the frequency — or lack of frequency — with which manufacturers make sales calls to independent operators, “which creates barriers to communications and tells the retailer we don't care,” Scholtes said. “Manufacturers have to understand that frustration and address it, because there are real business opportunities out there. But sales calls are not the most efficient way to dispense information.”

According to Rehkopf, the problem with finding alternative methods of communication is complicated “by the fact some retailers are not interested in upgrading their stores in terms of technology.” While he conceded that the use of in-person sales calls is likely to disappear, “it will be tough to lose that relationship, because nothing electronic can replace it,” he noted.

The comments from workshop participants came in response to a survey conducted late last year by Mark Boyer, president and CEO of PMG, Lindale, Texas, to assess barriers to relationships among trading partners.

“Two themes continually appear in the survey: the need for better communications between all parties in the value chain, especially the use of the Internet and email, and the development of buyers and salespeople who have the right set of skills and abilities to best serve their customers,” Boyer said.