The Future Created by Data Collaboration Between Retailers and Manufacturers Vol. 1: Challenges in "Product Information Collection" in Retail

In this article, based on my own experience, I would like to explain in three chapters what kind of value can be created through data collaboration between retailers and manufacturers. I hope it will be of some help to your business.

Introduction

First, I will briefly explain the structure of this article. In Chapter 1, titled "Challenges of 'Collecting Product Information' in Retail," I will mainly explain the current state of product information collection and the information that is needed. In the following Chapter 2, "The Form of Retail and the Shape of Information," I will organize the forms of retail and the information required. In the final Chapter 3, "The Future Created by Data Collaboration," I will discuss and forecast what kind of value data collaboration will create, including my own hopes. Please read on while thinking about how it applies to your own work.

Definition of Product Information

What is "product information"? From the wording, it is clear that it refers to information related to products, but products come in many different forms. For example, there are tangible goods such as food and daily necessities, and intangible services such as insurance and travel. To make the discussion easier, I will limit the scope of "products" in this article to tangible goods, and assume that they are sold in B2C transactions.

In this case, examples of product information for food would include product name / manufacturer name / price and cost (purchase price) / product category / release date / JAN code / weight / ingredients (including place of production) / nutritional information / allergy information / best-before date (sales period) / packaging style / packaging type / temperature range during transport / package images / advertising placement information such as commercials and flyers / product copy (sales pitch) / in-store POP data / delivery method / sales area / sales channel / usage and consumption method / sales trends / contact information (call center) / customer reviews, and so on. For products such as home appliances, information in instruction manuals, information for parts management, and conformity information related to safety would also be necessary.

As you can see, even when the target products are narrowed down, product information includes a wide variety of information. However, I believe these pieces of information can be broadly divided into two categories:
① Static information: information related to standards/specifications that does not change much
② Dynamic information: information other than standards/specifications
.

How Product Information Is Collected

So how do manufacturers and retailers collect the product information defined in the previous section? Since the purposes for using product information differ between manufacturers and retailers, the information required is different to begin with, but for most of the static information mentioned above, the manufacturer prepares it and provides it to the retailer. For example, it is common for the retailer's required information prepared on the retailer side (= the product master) to be filled out by the manufacturer's retail representative (so-called sales representative) in a standard format prepared by the retailer and then submitted. On the other hand, dynamic information is collected and provided in various ways. For example, advertising placement information changes depending on the timing and volume of placements, so it is often communicated each time by the manufacturer's sales representative during regular meetings with the retailer's contact person (so-called buyers, etc.).

Also, you may often see a catchphrase like "No. 1 brand" on a product package. In many cases, this is shown after each manufacturer purchases ranking data from a research company or the like. In addition, methods of obtaining review information vary depending on how it will be used, but for example, if it is information that will be publicly disclosed externally, such as "XX% of customers are satisfied," it is collected through surveys. If it will not be used externally—for example, when a product developer wants to check product reviews—it may be gathered by checking social media and other sources. As an aside, when I worked at a convenience store before, an excellent product development manager frequently checked not only sales data but also review information and made great use of it to improve products.

In this way, because static information is mainly provided from manufacturers to retailers, it seems there would be no major problem. However, as explained in my earlier contribution, "Why Product Masters Now?", because "the required information items differ from retailer to retailer = the product master differs," it currently costs manufacturers' sales representatives a great deal when they provide product information to retailers. In addition, with dynamic information, the information itself fluctuates over time, and there is also the issue that the information is highly likely to vary depending on the timing and method/source of collection, as well as the skill of the person who collected it.

Thinking About the Necessary Information

Next, let's think about the information needed to build a product master for the coming era. The first thing to consider here is the purpose for which the information will be used. Many people may think that is obvious, but I suspect there are not many companies that do this well. That is because they often have not been able to identify the necessary information across the entire company.

In retail, for example, buyers need at least the information registered in the product master. On the other hand, on the store operations side, not only sales figures for the target product (such as sales and profit data) but also exposure information from TV commercials and TV programs, review information, seasonal indices, and prices at other companies are extremely important. In addition, on web-based media/channels such as websites, apps, and online supermarkets, you will also need product images with strong appeal, images and videos that show usage scenes, and, for food, recipe information.

Another aside: while I was working at the convenience store, when the public relations department issued releases for specific products, it often added catchphrases such as "Cumulative sales of XX billion units!" or "One sold every XX seconds!" In particular, cumulative sales had not originally been calculated and stored as data, so it was necessary to aggregate data retrospectively. As someone who was actually in charge of obtaining the data, it is a secret that I thought, "What a pain," but this is also one form of information, isn't it?

As you can see, even within a single business entity, the information required varies widely by department. I think there are extremely few companies that collect, manage, and operate this kind of department-specific information in a centralized way. However, with AI making extraordinary advances, I believe companies that manage this product information efficiently have a major advantage.

Summary

How was "Chapter 1: Challenges of 'Collecting Product Information' in Retail"? Finally, I would like to briefly summarize the issues.

The first issue is the challenge of product information being provided from manufacturers to retailers. Since the product information items required differ from retailer to retailer, manufacturers need to provide product information tailored to each retailer, which incurs significant cost. If we think of that cost as ultimately being reflected in product prices and borne by consumers, it is very wasteful.

The second issue is the variation in product information, especially dynamic information. Dynamic information is assumed to be collected by the people in each company who need that information, and I believe the resulting information reflects the collector's bias to a considerable extent. For example, some readers may have actually been responsible for conducting surveys. In surveys, results can change significantly depending on the wording of the questions and how the answer choices are presented. This is especially important when someone other than a professional survey company creates the questionnaire. That is because the questionnaire creator's own assumptions and biases may be strongly reflected.

The third issue is the challenge of centralized collection, management, and operation of product information within each company. At present, product information that has been optimized only from a departmental or business-process perspective is often scattered around, and if there is product information that needs to be expanded, isn't it the case that each department and each business owner expands it separately? Considering not only the cost of doing so, but also the integration cost when centralized product information becomes necessary in future AI and DX promotion, it makes my head spin.

Thank you for reading to the end. Please also read Chapters 2 and 3.
The End

＞＞Chapter 2: The Form of Retail and the Shape of Information