Supply Chain Transparency in the Age of Digital and Physical Convergence

As consumers spend more time online, their shopping experience expectations are changing. Digital devices play an increasingly central role in shopping and have become consumers’ go-to source for product knowledge. This is the age of digital and physical convergence. More people are researching a product prior to purchase and shopping via multiple channels to get the products they need, whenever and wherever they want them. From click-and-collect models to delivered gourmet meals, shoppers are taking advantage of multi-channel offerings and are demanding food companies to go a step further to provide information on food origins, preparation, and ingredients.

While many factors contribute to the blurred lines between real and virtual marketplaces, the smartphone has been the top catalyst. A recent NinthDecimal Mobile Audience Insight Report found that 59 percent of consumers use their mobile device while grocery shopping—an increase of 16 percent from the previous year. Consumers use them to review shopping lists, search for discounts, learn more about products, and to make purchases.

Moreover, a recent report from The Boston Consulting Group and the Grocery Manufacturers Association found that consumer packaged goods companies (CPG) are facing a winner-take-all world in which about half of sales growth is coming from digital channels. According to the study, CPG companies today face a fundamentally different set of competitors than in years past, and even small companies or apps can be massive disruptors.

With a focus on the empowered consumer, it has become clear that the ability to harness and present product information for digital consumption is a key innovation for the food industry. Grocery industry suppliers, distributors, retailers, trade associations, academic institutions, and solution providers that are part of the GS1 US Retail Grocery Initiative are working to further define and use a standards-based approach to delivering on the consumer’s call for greater supply chain transparency through the development of best practices and guidelines. They are asking themselves: How can we help consumers get accurate and consistent information about the food they eat, and deliver the product safely and efficiently?

Grocery supply chain partners are leveraging standards in four important ways that will help their capabilities better align with consumer priorities. They are focusing on data quality, product availability, product images, and product authentication to become more in tune with the emerging trend of omni-channel grocery shopping.

Data Quality

Today, huge amounts of data are being created and consumed. Researchers from EMC/IDC predict the total size of the digital universe will double every two years to reach between 40-44 zettabytes by 2020. To put that into perspective, 40-44 zettabytes of data is the equivalent of 6.6 stacks of 128 gigabyte tablets extending from Earth to the moon.

Consumers rely on online information to make purchase decisions—this includes product descriptions from suppliers, distributors, and retailers. Companies are challenged to keep product information consistent across all platforms simply because of the time, resources, and know-how that have not been traditionally dedicated to safeguarding data quality.

Until the online data explosion, data inaccuracies were considered a cost of doing business. Little attention had been paid to product listings that were typically only exchanged between trading partners. Now, forward-thinking companies realize that accurate product data is a powerful tool in today’s marketplace.

To address data quality challenges, supply chain partners from both the supply and demand side of the grocery business provided input to develop the GS1 US National Data Quality Program, which helps companies across various industries ensure accurate and timely product information.

Companies that leverage the guidance of the GS1 U.S. program for their own internal data quality initiatives focus on data governance processes to support continual, effective product data management. These companies understand the integrity of product data must be maintained throughout the product’s lifecycle and at any point during the supply chain.