CHICAGO -- Food retailers who fail to adopt data synchronization run the risk of being put out of business by those companies that use it successfully to drive costs out of their systems, two industry leaders told attendees at the Food Marketing Institute Show here last week.
"The risk is that you get left behind," said Bill Grize, chief executive officer, Ahold USA, Chantilly, Va., in a presentation at the opening session of the trade conference. "We could literally be talking about whether or not organizations survive.
"It's tough, dirty work, and it's painful, and that's why people aren't doing it, but it's essential," he said.
Both Grize and Danny Wegman, chairman, president and CEO, Wegmans, Rochester, N.Y., said retailers must overcome the resistance of their information technology departments and make the move to adopt data synchronization based on their company's business needs. They encouraged attendees to discuss data synchronization in more detail with those companies that already have adopted it and with UCCnet.
"One thing you need to do is talk to the people at UCCnet, and don't send a technology person, send a business person," Wegman said.
Wegmans has been using the process for about seven years and has seen benefits in several areas, including better in-stock positioning and reduced costs, he explained. He said retailers in other industries, including Staples and Office Depot in the office-supply business, also have seen significant benefits from adopting data synchronization.
"For some reason, we in the supermarket industry are still lagging on this," he said.
Cost savings for the entire industry are the biggest reason for making the switch, Grize said.
"We all say to our customers that we are going to deliver to them the best-quality products at the lowest possible costs, but we are all telling little lies to them," he said. "There are literally billions of dollars that we leave in the system."
While the cost of each transaction with vendors today can be 50 cents or more, he said, switching to a synchronized data format would cost just a fraction of a penny per transaction. "Look at the savings over the billions of transactions that we do," he said.
Some suppliers have been hesitant to get on board because the acceptance in the retail channel has been limited, Wegman said. Those suppliers that have adopted data synchronization have seen significant benefits.