CHECK IT OUT 1994-02-28

John Karolefski

In the beginning, there was scan data. In the end, there will be the reward of Efficient Consumer Response. But right now, retailers and manufacturers are operating between those two extremes. Amid reams of scan data, they are engaged in a great struggle to figure out how to work together better. For ECR to have an impact, one cannot really advance without the other. Scan data accuracy is the key.

David Jenkins, vice chairman of the industry's ECR Committee and former chairman of Shaw's Supermarkets, vividly explained why. "If you're going to do space and category management, along with computer-assisted ordering, you must know what you've sold before you can order it or manage it on the shelf," he said, speaking at the Food Marketing Institute's Midwinter Executive Conference last month in Boca Raton, Fla. For many reasons, 1994 is shaping up as a seminal year for scan data. First of all, ECR starts rolling this year with several pilot tests. Without accurate scan data, it will not be possible to achieve the full benefits of the four key elements of ECR: computer-assisted ordering, continuous replenishment, category management and validated promotion compliance.

Second, "real-time," or daily, store-specific scanner data is now available from Efficient Marketing Services and Catalina Information Resources. With this data, the industry can upgrade such activities as inventory management, direct store delivery and promotion analysis. Third, the technical sophistication of the industry is increasing exponentially. In today's competitive, ECR-focused environment, can retailers afford to be the weak link that binds them with manufacturers and data suppliers? Since it's their data to begin with, it should be gospel. Surely, scan data accuracy will be part of many conversations between vendors and retailers this week at the Food Marketing Institute's MarketTechnics Conference and Exhibition in Tampa, Fla. In fact, an educational workshop today will deal with improving the quality of scan data. The speakers include Sid Pasoff, vice president of management information systems for Oshawa Group; Paul Nicholson, vice president of finance and management information at Pay Less Supermarkets; and Carlene Thissen, president of Retail Systems Consulting. She also is the information technology columnist for SN's Brand Marketing publication, the twice-monthly newspaper for manufacturers.

According to Thissen, scan data accuracy begins with the retailer. At the workshop, she will explain these keys to improving accuracy:

Have a price coordinator in every store.

Allow authorized store personnel to make changes to the item file, except movement.

Monitor all changes which are logged in the store's electronic transaction log.

Be sure to have adequate transmission lines.

Automate everything possible.

Reinforce to cashiers how important the data is.

Scan data accuracy will improve as much and as fast as retailers want it to. If they don't want to invest what it takes to approach 100% accuracy, then manufacturers won't want to invest their time, money and effort. And the shining promise of ECR will thus slip into the void.