You bet it does: bad product data can lead to lost sales due to out of stocks, delays in new product introductions, and lost opportunity due to money and effort being spent on workarounds. That’s got to impact growth.
If the data is inaccurate re-supply can go wrong or shelf placement can be thrown out of whack by faulty dimension data leading to physical products not fitting with the store planograms produced by merchandisers. Although some stock-outs will see consumers purchasing alternative brands, a study by industry analyst firm AMR Research (now part of Gartner) point to nearly half of out-of-stock instances resulting in a lost sale for the retailer. And while this might not always result in a lost sale for the supplier, as the customer can pop across the road to another store, AMR says that in 37 per cent of cases they don’t, so everyone loses.
As the retail industry becomes more complex, product life cycles reduce and consumer outlets become more varied, the demand for faster delivery of more diverse and accurate data will increase. Many retailers can carry well over 100,000 product lines, with an average life cycle of 2.3 years. So in the UK for example an estimated 40,000 products change each year – so if your product introduction is delayed by data problems, your bottom line growth will too.
The amount of time and effort spent on workarounds to deal with poor quality product data has got to be one of the most frustrating issues facing both suppliers and retailers. For example the grocery industry in the UK estimates that as many as 40 per cent of invoices do not match with deliveries. That’s 40 per cent of invoices, which despite investment in supply chain automation that require manual investigation and intervention. A significant proportion of the errors can be attributed to inaccurate product data, which also leads to wrong shipments, delivery rejection and unnecessary returns. In the UK alone the cost of workarounds processes required to deal with these problems is about £47 million ($73m) a year according to GS1 UK’s Data Crunch Report – with retailers taking a hit to the tune of £27 million ($42m) and suppliers spending about £20 ($31m) million on their side.
I could go on…but I won’t because I think you get the picture at this stage, bad data really can stunt your growth.