Data Management in Retail: The Inevitable Path to Efficiency

Written by Antonio Sanchez Boned, Consumer Goods Advisor at SDG Group.
I started in the Consumer Goods sector more than 30 years ago. During this time, this industry has changed a lot, and so has technology. If I've learned anything, it's that retail success no longer depends solely on having the best product, the best sales strategy, or the best space on a major city avenue. Data management is a fundamental key—and I'll tell you why.

Nowadays, information has become the main strategic asset: those who know how to manage it can grow their business. Those who don't are left behind. In a market as competitive as Consumer Goods, it's very important to know how to manage all data intelligently and efficiently.

Context: A Better-Than-Expected Half-Year, but Not Without Its Challenges

The first half of the year exceeded expectations in the FMCG sector, with value growth of 3.5% (according to Algori). This positive result, however, should not blind us to the structural difficulties facing brand manufacturers: their shelf space is increasingly shrinking, pressured by the unstoppable advance of retail brands. Furthermore, the crucial summer period adds additional complexity to management and planning thanks to high seasonality in many categories.

Much of this growth is explained by the expansion of more focused and efficient, narrow-range retail brands. For brand manufacturers, the key is to apply the same logic: be effective and activate the levers that can generate the greatest impact on the business. In this sense, price and promotion management—also known as global pricing—is one of the most decisive. Having tools that allow these variables to be optimised is no longer optional; it is an urgent necessity to compete on a level playing field.

The truth is that we cannot deny that we are living in an exciting time in the data space. We have the technological capacity to integrate and cross-reference all sources of information, generating analyses that are much richer and more precise than ever before. This involves crossing structured data, data that can be part of a database, with unstructured data such as images, video, or audio. A good example of this type of data would be posts generated on social media, which undoubtedly provide a wealth of information of interest to retailers.

This great power, however, entails new responsibilities. Internal information management is becoming a requirement, both due to the need to ensure full control over sensitive data and to protect critical business information. Along this path, it is key to choose good technology partners that combine business knowledge and the ability to implement the right solutions.

Artificial Intelligence: The New Travel Companion

In this context, a player has emerged that has revolutionised everything in record time: Artificial Intelligence. Until a few years ago, it was unthinkable that a salesperson or buyer could rely on an assistant capable of providing information in near real time, automatically cross-referencing it with other terms of interest, and also offering recommendations and forecasts to optimise results. Currently, thanks to AI, it is possible to anticipate demand more accurately, optimise stocks, and significantly improve operational management.

I cannot venture to predict what Artificial Intelligence will look like in the coming years, nor how retail will have evolved or what the consumer profile will be like. But, I can offer one piece of advice: investing in data management is more important than ever. It's not just about growing sales, gaining competitiveness, or achieving the internationalisation of a business. It's about not falling behind.

Retail and mass consumption have made great progress in recent years, but there is still a long way to go. Therefore, this is the time to firmly commit to data management as it is the only way to make business more efficient and maintain competitiveness in an increasingly demanding sector.

Information is power, but only if we know how to turn it into useful, actionable knowledge.

Originally published in Spanish on Retail Actual, here.