How smart is IRi to acquire RSi? Smart, VERY smart. But will the CPG industry be able to take advantage? And how does this deal impact trade promotion?
In the past few weeks, Information Resources Inc., one of the top data analytics suppliers to the CPG industry acquired POS data provider Retail Solutions, Inc. (RSi) for an undisclosed amount of money, but a heavily disclosed value to supply chain analytics.
According to Andrew Appel, CEO of IRi, “The investment in RSi to enhance our supply chain optimization capabilities is a direct response to our clients’ needs as they navigate disruption caused by the COVID-19 pandemic.” Baljit Dail, president of IRi Global adds, “Optimizing supply chain through better end-to-end visibility, efficiency and execution has never been more important to retailers and manufacturers across the CPG landscape.”
Ah, OK, supply chain enhancement.
Mr. Dail then states, “The addition of RSi’s leading solutions to our broader portfolio of offerings will further enhance our robust capabilities and enable retailers and manufacturers to drive tangible ROI and capitalize on opportunities in a dynamic environment.”
OK, that’s more like it.
Make no mistake, this is a landmark deal in the world of CPG, perhaps across the whole of consumer products and across all channels and all industry subcategories.
The phrase “Supply Chain” is plastered all over the myriad of announcements made by these two companies, and we get it…everything flows through the supply chain. But take a close look at what the acquisition announcements state as the top value grabbers to CPG and retail companies for this deal…and at the risk of repeating what you’ve already read, I’m quoting the announcement here:
- “Unparalleled suite of supply chain solutions:Adding RSi’s comprehensive, industry-leading supply chain offerings to IRi’s existing supply chain capabilities will provide seamless integration of currently disparate data assets, creating comprehensive end-to-end supply chain visibility and enabling clients to more efficiently identify and address operational bottlenecks and inefficiencies.
- Expanded market coverage:The combination of IRi and RSi data assets creates the largest repository of store- and warehouse-level supply chain data, enabling unrivaled national supply chain solutions and capabilities.
- Enhanced collaboration between retailers and manufacturers:The integration of RSi’s solutions, including its Pacific platform, within IRi Liquid Data provides unprecedented collaboration capabilities within the supply chain ecosystem, creating opportunities to significantly improve clients’ core supply chain metrics.
- Seamless technology and data integration:Ability to access RSi solutions through IRi’s industry-leading IRi Liquid Data® platform will deliver intuitive, groundbreaking and results-oriented analytics and business intelligence in near real time, fully integrated with other IRi solutions and data assets. In particular, RSi’s leading suite of on-shelf availability (“OSA”) solutions, OSAPower, includes a full spectrum of AI-driven tools to diagnose, reduce and prevent out-of-stocks.
- The most intelligent Digital Shopper Marketing analytics:As part of the merger, RSi’s Ansa solutions will be offered by IRi’s Media Center of Excellence. Ansa, a three-time winner of Shopper Marketing Magazine’s Editor’s Choice Award, empowers ad networks with the intelligence they need to plan, target, optimize and measure their campaigns based on daily, store-level sales and inventory.
- Augmented decision-making: IRi’s unparalleled data assets, extensive geographical coverage, and artificial intelligence and data science capabilities will enhance the supply chain offerings previously provided by RSi by incorporating augmented decision-making capabilities. IRi’s advanced platform pushes opportunities and risks to users in a seamless and efficient manner, including opportunities to improve on-shelf availability and reduce out-of-stocks, to drive both top-line and bottom-line growth along with superior in-store consumer experience.”
All are very strong values and certainly validation for the acquisition, indeed, no doubt.
But again, with one exception, the emphasis is on supply chain enhancement. In the fifth bullet is the most important nugget in this announcement, in my opinion – expanding the capabilities to infuse the long-running supply chain optimization process with real, accurate and believable consumer shopper marketing data.
Now be careful here…don’t confuse the phrase in the fifth bullet, “empowers ad networks with the intelligence they need to plan, target, optimize and measure their campaigns based on daily, store-level sales and inventory” as anything other than improving the supply chain performance. It’s true that this points to trade promotion effectiveness, but I have to note here that nowhere in this announcement does it say that this acquisition between two great data powerhouses in the CPG industry will contribute to the success that a CPG supplier will have in the more critical outcome metrics for improving overall consumer engagement through the merger of trade promotion and consumer direct marketing.
But it does. BIG time.
So, before I am branded “unfair” in my assessment here, I will give credit to the deal for building a more robust environment for, as it is said in sixth bullet, “Augmented decision-making.” Yes, absolutely this will improve coverage and extensibility of data assets, as it points out; but then in the end, it again points to this as an opportunity to improve out-of-stock conditions and “in-store experience.”
Don’t get me wrong…I’ve made a good living working with CPG suppliers and retailers to improve out-of-stock conditions; but the point I am making is that the IRi/RSi alignment will also have a super impact on something that has been critically overlooked for decades – getting the consumer to WANT and NEED to shop and buy, specifically shopping at YOUR store and seeking to buy YOUR product.
Traditionally, trade promotion began as an incentive for the local retailer to promote the supplier’s product in the local market, generating interest and promoting a price value that drives the shopper to add it to their market basket. For over fifty years, the trade promotion funds have devolved into a single purpose – provide a discount palatable enough for the retail buyer to purchase a truckload of product. Sure, they agree to configure a promotion with specific tactics that are intended to generate shopper appeal inside the store, but until recently, the key account manager has not been compensated based on anything but the volume, revenue and profitability of the initial sell-in deal.
As more CPG companies begin including trade promotion success and ROI metrics in the compensation, the need for more insightful predictive analytics and optimization of a broader set of data will increase in criticality. CPG suppliers will need to ensure a more rigorous collaboration between sales, who owns the trade promotion and corporate marketing who owns the consumer direct promotions, advertising, coupons and social media promotion. This gets to an even higher quality augmented decision-making value proposition that the IRi/RSi bullets covered above.
The question I pose now is whether or not the CPG industry of today can actually take advantage of this combined data technology. It’s a good question, because so many of my TPx vendor colleagues, especially those in the revenue growth management analytics business continue to hear objections to advanced analytics solution implementations that their key account managers, demand planners and sales reps “are not ready to effectively use this technology.”
There is no time to waste today, whether you are a retailer or CPG supplier. The United States Marines have a great motto: “Improvise, Adapt, Overcome!” That attitude has a 250-year success rate!
Now that these two companies have brought together assets that clearly improve the quality of data around POS, on-shelf availability, near real-time supply chain visibility, and a better shot at predicting more accurate and reliable trade promotion ROI, there should be more of a fear of missing out than there is fear of change.
RSi is one of the premier POS data providers and delivers a more accurate stream of POS data than either IRi or Nielsen. Mark me, I am not saying that their products are not highly useful and extremely important to determining the causality that produces ultimate success. But neither of these firms typically provide data from each and every single retail location, rather they deliver solid intelligence based on averages and extrapolated projections that are reasonably accurate, but of course, not exact. And due to the effort to provide effective analyses with that data, the information is often a week or more after the promotion. The trade-off is good intelligence for immediate intelligence.
With the continuing pressures brought to bear on the brick and mortar retailers by the ecommerce juggernauts, developing trade channel and direct-to-consumer promotions designed to reach the consumer and MEASURE the results of those promotions in near real-time is becoming mission critical.
RSi provides POS data that not only covers every retail location, but with the capacity to deliver data from yesterday, which as we have seen in the Covid-10 pandemic lockdowns, becomes an even more important aspect of consumer engagement.
So, along with the expanded marketing data and the slow, but rapidly evolving collaboration between corporate sales and marketing executives, the production of value from the IRi/RSi deal will prove to be even higher than the above stated benefits. And the overall value to trade promotion is, as I have been stating in blogs, articles and podcasts for years, a “have-to” move for all CPG companies globally.
Supply chain optimization is now more than a “nice-to-have,” isn’t it? Supply chain resilience, in particular, is on the minds and plans of every retailer, ecommerce vendor, supplier and distributor worldwide. Trade promotion optimization, as a key component of revenue growth management, is exponentially increasing in importance to the C-suite, and this marriage between IRi and RSi is smart – VERY smart.
Great move, Mr. Appel and Mr. Clement. Now let’s get the consumer products industry inside the same 24-hour shopping scope as the consumer!
Pay attention Nielsen, it may be time for you to follow suit.
That’s my two cents.