Improving Buyer Relationships Using POS Data

Time and time again, when setting up new vendors with Accelerated Analytics®, the same dilemma is expressed in some form or other: “We know that this product sells well here, but our buyer won’t listen to us.”  To determine why, the return question is invariably, “What evidence are you giving the buyer to back up your assertions?”
 
Almost as often as the initial question is expressed, the rejoining comment is met with frustration at the inability to provide the evidence the buyer wants to see.  This can be due to a vast array of issues, not the least of which is simply a lack of time to collect and analyze the available POS data and provide the buyer with real concrete evidence.  Conversely, it is rarely the case that vendors have insufficient data to make these conclusions.  As such, it is frequently a third party data analysis company that can provide the additional tools necessary to turn the POS data into actionable information for the buyer. Here are some tips:

1. Buyers fall into roughly two categories—those that are helpful and those that aren’t.  If you have a helpful buyer, you’re already a step ahead.  Work with the buyer to determine key performance indicators (KPIs) like target weeks of supply and preferred sales velocity for given items.  (Since these KPIs need to be managed at an item by store level, it may be necessary to use a third party analyst partner to assist you in building your database and reporting solutions.)  Then, track these KPIs for your products and show your results to your buyer—often you have better insight into your product activity in their stores than they do.  Since your buyer is friendly, work with him or her, using the information you’ve tracked and presented, to improve sales, limit out of stock, and prevent overstock.
2. The unhelpful buyer is more difficult, but by no means a lost cause.  For example, Wal-Mart buyers will almost always refuse to accept a push order of products from you, the vendor. But our experience with Wal-Mart is that this is usually because they have better insight into your product activity than you do.  However, if you can consistently demonstrate that your use of the POS data readily available to you would have rendered a more accurate result or better yield, then the buyer will gradually begin to trust your numbers instead of theirs.  This can be done, for example, by tracking your inventory, computing your weeks of supply, and showing your buyer, by item by store by week, which items you would have shipped to them and when.  If you can cross reference this at the same grain with a report showing out of stock stores, you can easily compute lost sales.   When, over time, the buyer sees the evidence presented consistently and the potential for increased sales, by simply doing nothing on his or her part except accepting an order file from you, you can begin to change your relationship with your buyer, and as he or she becomes more amicable, you can develop the type of relationship that allows you to discuss other KPIs as indicated in tip #1.

Managing POS data at an item by store level can be difficult and time consuming, especially when trying to build detailed, insightful reports like discussed in #2.  Accelerated Analytics® can give you one-click access to reports that will answer dozens of these kinds of questions and more.