Secure online POS SKU analysis for manufacturers

While point of sale analytics capabilities can be developed using business intelligence packages, a new breed of Web-based solutions can transmit confidential product SKU information securely using electronic data interchange (EDI), and combine data points from multiple retailers into customized Web-portal dashboards.

By Rob Humphrey, Jeff Burdick November 11, 2009

As packaged goods manufacturers and retailers struggle to claw their way out of the recession, they need every advantage at their disposal to make sales and keep customers coming back for more. Being able to slice and dice point of sale (POS) data to measure and track customer buying behavior and sales trends on demand is vital to achieving a leading edge. Simply put, it enables your stakeholders-sales, marketing, finance, operations and IT-to make sense of the volumes of product sales and inventory data collected daily from your retailers and use it to drive sales. It puts you in the driver’s seat.

While POS analytics capabilities can be developed using business intelligence packages, a new breed of Web-based solutions are emerging. The most advanced of these analytic solutions integrate data points from multiple retailers into customized online dashboards. These dashboards give users, based on their unique role in the company, visibility to on-demand analytics—those key performance indicators (KPIs) that lead to fact-based decision making. Such actionable information helps to increase ROI and drive down the cost of doing business within each stakeholder’s respective business model. What’s more, information can be analyzed and viewed as it is received, cutting days off the time it takes to recognize problems using manual methods-if you can do it at all.

Another important component of the newest POS analytics programs is the ability to transmit confidential product SKU information securely using electronic data interchange (EDI) to an online web portal that provides a customized dashboard to analyze retail customer buying behavior and sales trends. The threat of theft by cybercriminals is too great to send any sensitive company data or document over an unsecured pipe, yet many manufacturers still connect with their retail trading partners over insecure value added networks (VANs).

Power of information
Analyzing customer buying behavior and sales trends using an integrated systematic approach can level the playing field for smaller manufacturers competing against larger manufacturers for retail shelf space. It can also reduce costs for any size manufacturer. Having visibility into KPIs by geography, product category or SKUs-either in a 3D geographical view with charts or grid views based on roles via a customized dashboard-and being able to run a variety of sales and inventory reports by market segment on demand, provides actionable intelligence that translates directly to competitive advantage and operational efficiencies of scale.

With a dynamic Web-based POS analytics solution, manufacturers can provide value to retailers with timely insights into product performance by store or region, fostering a stronger partnership.

Being able to manage, monitor and report on product SKUs at any level of detail by role is a powerful tool for timely analysis that can drive fact-based action. Being able to run product category or individual product performance reports at the store, region or national level for any time span provides a history that can be used to anticipate product demand using a variety of parameters to ensure the appropriate mix of products are stocked at the right time. Such fact-based information gives sales reps, merchandising service organizations and manufacturer’s reps the ammunition they need to push retailers for better in-store placement and displays, and prompt active promotion to increase sales of in-demand items.

All is null if not secure
Transmitting POS information through secure EDI data transfer will keep confidential information out of the wrong hands, and keep track of when information is sent and received.

Using a Web-based POS analytics solution paid for by monthly subscription (based on the amount of data transported, known as the "data load") eliminates upfront software and hardware investment and deployment costs, and scales without a cost increase to provide unlimited access to any number of users. Software as a service (SaaS) solutions are managed by the vendor and produce a quick return on investment over traditional software solutions that must be installed in a data center. Such a "pay as you go" service lets users begin using the analytics program quickly, avoiding capital expenses.

Some Web-based solutions also can push alerts based on a variety of KPI thresholds to a variety of desktop and mobile devices. This benefits all stakeholders by providing timely information on product performance and inventory levels wherever they may be—in their offices, in a store aisle, or anywhere in between.

Working together, manufacturers and retailers can be more successful than working in a vacuum. Most manufactures collect POS data from their retailers-an important first step. But being able to distill that information down to actionable information based on current and historical data provides immediate value to manufacturers working with multiple retail partners. It provides the facts a manufacturer needs to win better product placement, warrant special promotions, reallocate resources, lower returns, reduce markdowns, sell more product, retain customers, and beat out the competition on all fronts. It can also streamline operations and decrease expenses.

If you know which retail outlets are underperforming and need more attention, your employees can know exactly where to focus their efforts and have the greatest impact. This can have the added benefit of reducing travel and other expenses.

Using a Web-based POS analytics solution can drive down costs by providing the data that sales, marketing, finance, operations and IT departments need to make intelligent business decisions. The objective, fact-based category management derived from easy-to-interpret POS analytics provides a laser-focused view of each product’s performance, removing the subjectivity from those everyday important decisions that drive your company’s growth and profitability.

About the Authors

Rob Humphrey is the national account manager for data protection software vendor nuBridges, Inc . Rob can be reached at .



Jeff Burdick is the Chief Operating Officer for eSENSE Retail Corporation , a point-of-sale analytics company for the retail and packaged goods industries. Jeff can be reached at .



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