Free Data, Paid Analysis

by Guy Cuthbert, Atheon Analytics

With freely available trading data, why aren’t supermarket suppliers providing perfect service?

The recent announcement from Morrisons that it is making MSD (Morrisons Supplier Database) free to ALL suppliers marks a significant milestone in grocery retailer-supplier collaboration. Morrisons is the last of the “Big 4” supermarkets to make upstream data (sales, stock and service) available without charge to all of its suppliers; this has been the case at Asda, Sainsbury’s and Tesco for some time. Yet data is often described as a business asset, so why have these supermarket giants decided to make such an asset freely available?

The answer is that data, in its raw form, actually has very little value; value is generated from the effective analysis of this data, in order to address business problems and capitalise on commercial opportunity. Data-driven businesses often liken data to oil – the foundation of an entire economy, and one of the most essential commodities of the modern world. Yet raw crude oil once had very little value; only in the last 150 years has it become the lifeblood of the global economy. This transformation came about through:

  1. Scientific discovery and process innovation:
    refining crude oil into an increasing number of usable end products
  2. Increased demand from new uses:
    the emergence of kerosene heating and lighting, then internal combustion and jet engines

The parallel with data is that value increases as the raw product (crude oil / raw data) is refined into usable fuel types for key activities (heating & transportation / insight & decision automation). Yet the market for data is, in many ways, far less mature; raw data is provided to end users who have limited ability to consume it. This is the equivalent of buying crude oil and attempting to refine it in our kitchens to produce fuel for our cars, or at our desks for the business’ transport fleet! Few of us understand the relevant process required to ‘crack’ crude oil into usable fuels, yet most of our businesses (and our customers and suppliers) place many demands on the use of such fuels.

When applied to oil we recognise the ridiculous, yet most grocery suppliers still refine and retailer data in this way; ‘crude data’ is collected periodically and ‘refinement by spreadsheet’ results in low-quality fuel for critical business decisions. Worse still, some simply choose to ignore the vast crude data resource, fearing that they will drown or explode attempting to refine it. Raw data is not what is needed for effective decision-making; high-quality analysis / insight is what powers informed decisions, as high-octane petrol powers high-performance sports cars. The Morrisons’ announcement means that all of the Big 4 are now providing crude data for free, but all four are expecting their FMCG suppliers to refine that data into high-octane insights themselves.

So why are supermarkets giving ‘crude data’ away without charge? All recognise that upstream data (sales, stock and service data) is essential to the effective flow-of-goods between supplier and retailer; when refined, analysed and acted upon it improves on-shelf availability, reduces lost sales and enables all parties to better meet consumer demand. Restricting access to such data, by charging for it, reduces visibility for suppliers and risks the smooth flow-of-goods – this serves neither retailer nor supplier. This is very different from downstream data (as relates to shoppers and consumers), which has little or no impact on the flow-of-goods, but does provide potentially valuable insight on shopper and consumer behaviours for brand owners.

Freely available raw upstream data is the first step in reducing flow-of-goods friction and improving trading performance, but it is only the start of the process. That raw data needs to be collected regularly and refined efficiently to ensure a high-quality finished product, and then fed into the equivalent of the modern motor car – high-quality, reliable, insightful and actionable analysis machinery to enable FMCG organisations to address issues and opportunities in the flow-of-goods on a daily, weekly and long-term basis.

Atheon Analytics built SKUtrak to address these needs:

  1. A robust data pipeline to collect, refine and store safely the huge amount of potentially volatile raw data available
  2. An efficient, dependable, secure, high-performance analysis vehicle to allow drivers of all levels to make the most of the information, resulting in easily-communicated decisions

Critical here is the separation of these two principles; the data pipelines necessary for each retailer vary wildly in their specifics, but end-users require consistent analysis and insight. You don’t want a different analysis ‘vehicle’ for every source of upstream data, despite every retailer producing different data – this would be the equivalent of owning and driving different cars for fuel from Shell, BP and Texaco.

SKUtrak provides a consistent reporting and analytical toolset across all of the freely-available crude data from supermarkets. This allows end-users – account managers, demand planners and senior management – to work in an entirely consistent manner across well-organised, automatically managed, flow-of-goods information derived from raw retailer upstream data.

Atheon Analytics provides both Free and Premium (paid-for) SKUtrak services to over 400 FMCGs in the UK, making SKUtrak the UK’s leading grocery flow-of-goods tracker for FMCG suppliers.

If you want to use all your retailer data more effectively get in touch with Atheon Analytics on [email protected]