February 14, 2025 • 17 mins
Join us as we discuss with Joel Beal, CEO of Alloy.ai, the increasing practice of retailers imposing fees on suppliers for data access. We examine how this shift impacts supplier-retailer relationships and the broader implications for the consumer goods industry. In this episode we explore:
- Why Retailers Are Charging for POS Data – Joel Beal explains the factors driving retailers to monetize supplier access to sales and inventory data, from operational costs to new revenue streams.
- Impact on CPGs and Consumer Brands – How these fees affect suppliers' ability to make data-driven decisions, manage inventory, and optimize retail partnerships.
- Strategies for Navigating Data Paywalls – Joel shares insights on how brands can adapt, including leveraging alternative data sources and negotiating better access terms.
- The Future of Retail Data Access – A discussion on whether this trend will continue, what it means for supplier-retailer collaboration, and how technology could change the landscape.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Logan Ensign (00:01):
From Alloy AI.
This is Shelf Life.
Today, we're featuring aconversation with my colleague
and co-host, joel Beal, ceo andco-founder of Alloy AI, about
(00:25):
how retailers are increasinglylooking to monetize their data
and how consumer brands arepaying steeper costs.
How far will this trend go?
Are the insights worth the cost?
What does this say about thestate of retailer-supplier
collaboration in 2025?
On every episode of Shelf Life,we answer questions like these
and more, with the help ofleaders across the consumer
(00:47):
goods industry.
I'm your co-host, logan Ensign,chief Customer Officer at Alloy
AI.
We'll be back with Joel rightafter this.
Alloy Ad (01:00):
As a consumer brand, you connect with dozens of
external partners and internalsystems to get a complete
picture of your business.
Each one is different.
Alloy AI makes it easy toconnect data from retailers,
e-commerce, supply chainpartners and even your own ERP,
then easily surface insights todrive sales growth.
Every day, brands use Alloy AIto see POS trends, measure
(01:21):
promotion performance and makebetter replenishment decisions
with their retail partners.
That's why we're trusted by BIC, crayola, valvoline, melissa,
doug Bosch and many more.
Get a demo at alloyai today.
Logan Ensign (01:37):
All right, Well excited to be here and talk all
things retail data.
Joel, To kick us off, I thoughtit'd be good to just orient on
what we're talking about here.
We want to talk all about thatretailer-supplier data sharing
relationship.
I know you've been in the spacea while.
Maybe you catch up on what typeof data we're talking about and
the history of data sharingbetween retailers and their
(01:59):
suppliers.
Joel Beal (02:00):
Yeah, I think it's a fascinating topic.
It's one I've been thinkingabout for years.
There's some interesting trendswe're going to jump into about
what is broadly called retaildirect data.
This is the direct feeds,essentially, that a retailer is
(02:31):
providing to their supply base.
So if I sell through saidretailer, they give me access to
data about how my products areperforming there.
And this space really gotkicked off by Walmart.
Walmart's been an innovator inretail in a lot of different
ways over the years.
In the 90s, they released asystem called RetailLink.
(02:52):
Retaillink was a data portalbuilt so that they could come in
self-service and download dataabout their product's
performance what's selling, whatprice points, how much
inventory do you have and overthe years it developed, it got
(03:13):
more and more robust and, aswe'll talk about a little bit
later, has now been replaced bythe newest system.
So once Walmart did that,they're a leader in this space.
Other retailers started tofollow, and so in the subsequent
decades, hundreds and againparticularly as you talk about
in the United States or inEurope are sharing data with
(03:47):
their suppliers in one way oranother.
But the way that they'resharing data, how they're
charging for it, thoserelationships, those are
constantly in flux and there's alot of trends that we'll talk
about today.
Logan Ensign (03:58):
And Joel, you'd mentioned, hey, mid-90s, Walmart
being innovative, starting toshare this data.
It clearly worked.
If other retailers followedsuit and they continue to do it.
Why did it work?
What were some of the benefitsor objectives of starting to
kind of expose all this data tothe?
Joel Beal (04:13):
suppliers.
First of all.
These retailers are workingwith thousands, maybe tens of
thousands, of differentsuppliers.
Right, they have a team, theyhave their merchants who are
working with them, deciding whatto buy, when to buy it, how to
promote it, et cetera.
The idea was how can we pushsome of that responsibility on
our suppliers?
So let's give them informationand then expect more from them.
(04:36):
And if I'm on the brand side,I'm excited.
I'm going to see more about howmy products are performing, I'm
going to have, hopefully, morepredictability and can be a
better collaborator.
So that was the mindset behindwhy they started to do it and I
agree, clearly it worked wellenough that pretty much every
retailer decided to do the samething.
(04:58):
Now, somewhat in parallel tothis I don't know the exact
timing off the top of my head,but you have companies that have
been in this world of buyingand selling point of sale data,
the notable examples being whathistorically was Nielsen, now I
think it's Nielsen IQ.
That was a whole industry wherethey were buying and
aggregating this up and kind ofpaying the retailers for it and
then charging suppliers.
(05:19):
So they were a middle person inthis.
They do other things as well,and so there kind of became
these two avenues forunderstanding really how your
products were performing Onethat was more of a survey of the
market and one that was muchmore direct, specifically about
your business.
A little more operationalnature, a little more real time.
Logan Ensign (05:37):
You kind of also alluded to, hey, other retailers
followed suit but maybe had avariety of strategies.
We'd love to just kind of talkto what we saw post retail link
to today, the differentstrategies and sort of what
retailers have kind of tried tomonetize this and how that's
looked, Something that I've seencontinually is retailers
believe this is an absolutetreasure trove of value right
(06:03):
All the information that theyhave about you and me and our
shopping behavior.
Joel Beal (06:07):
They spent a lot of time and a lot of money over the
years collecting this.
Think of all of the loyaltyprograms.
Why do those exist?
Why do we get discounts when weuse them?
It's because the retailer isable to get more and more data
about us.
In their mind has always beenhow do I make more money from it
?
How do I monetize this dataWhether you monetize it by
(06:27):
selling it, whether you monetizeit by improving your own
operations, marketing, sales, etcetera by using that has not
always been quite asstraightforward as probably
people initially thought decadesago when they started to do
this, and so I've definitelyseen that tension Retailers.
It does make them better.
It makes their suppliers better, it's, but they want to get an
(06:49):
ROI from all this investmentthat they've made.
And so, to your point, walmartreally came out and said we're
going to do this for freebecause we're going to use this
to create a more efficientsupply chain.
And I assume implicit in allthat was suppliers were giving
you something, and so we expectyou to reciprocate by giving us
better service and being able todrive down the price of
(07:11):
products, and that's really beenWalmart's MO right, that's how
they operate as business.
Other retailers, I think, havecertainly gone down the route
historically of saying, well,how do we monetize this more
directly?
Can we charge for this?
And so we've seen over theyears examples of retailers
doing this themselves, ofpartnering with software or
(07:32):
third parties to essentiallysell through them.
Kroger's done that, homeDepot's done that, the Walgreens
has done that Costco A lot ofretailers have taken that
approach as well.
So I think we've seen in thehundreds of retailers that we
worked with at Alloy, most ofthem have provided ways to get
the data for free, but not allof them.
Logan Ensign (07:53):
And what's interesting is those ones you
kind of ticked off, many of thempartnered with software
companies to kind of helpaccelerate that data sharing
right.
And so there's another sort ofchallenge for these retailers
probably to provide a front endand sort of the infrastructure
to be able to share the data.
You know Walmart went in-housebut other retailers looked to
partner with other softwareproviders to kind of make that
(08:16):
happen.
Joel Beal (08:17):
Right, you're absolutely right.
Some went in-house, some workedwith third parties, and we've
seen a lot of retailers changestrategies Charge, then decide
not to charge or not charge andnow start to charge.
So everyone's trying to figureout this dynamic.
The other thing I'll throw in Iteased it a little bit earlier
is e-commerce has changed, Ithink, the perception of how
(08:39):
this should work.
So I think Walmart was thefirst big shift and started this
movement.
As e-commerce grows, especiallywhen the brand themselves are
the ones shipping the product,they have to coordinate very
closely with the e-commercemarketplace or the retailer that
they're dropshipping through,whoever it is.
(09:00):
So they're going to know wherethe product's going.
They have to know when theorder comes in, they need to
know where to send it.
So I think e-commerce has kindof showed what a much more
tightly integrated supply chaincan look like, and now the more
wholesale, traditional part ofretailer is starting to catch up
with that, but it's taking time.
Logan Ensign (09:19):
What's going on with Walmart, luminate and
RetailLink so 90s we haveRetailLink come out a pretty big
shift over the last 12, 18months to Luminate.
What's going on?
Where are we at now?
Joel Beal (09:30):
Yeah.
So I think for years there wereall sorts of rumors about what
is Walmart doing with RetailLink.
I mean, two to three years agothey announced that they were
going to release a new platformcalled Illuminate.
That has officially happened.
There was about a yeartransition period.
Now RetailLink has been atleast discontinued when it comes
to sharing the point of sale,the inventory data, and now
(09:53):
everything goes through WalmartIlluminate, which actually was
just rebranded, I think, liketoday, walmart Centilla.
So the big shift here is Walmarthas continued to provide a free
tier, but they're reallypushing folks to use what's
called Charter, which is theirfor a fee, part of Luminate.
(10:13):
Now, the great news here isit's a robust, modern platform.
They're making it better allthe time.
They're investing a lot.
We really love what we see.
I think it's bringing retailinto finally, the 21st century
here.
But they charge for it and youget a much more limited thing if
you go on the basic side.
So what does that mean?
(10:34):
Well, walmart I think publiclyhas stated that it's going very
well.
A lot of brands are signing up.
They're seeing a lot of growthfrom that.
I think we're going to see thiscascade now of other retailers.
Try to follow suit.
Of course, the big question isWalmart does $500 plus billion a
year in revenue.
When a retailer that's doing $5billion or $10 billion a year
(10:56):
in revenue tries to do the samething, you know, are they going
to have the same amount ofleverage over their suppliers,
etc.
And I think that's what'splaying out right now.
Logan Ensign (11:06):
And to your point that modern sort of data access
feels like Walmart is moreembracing.
Hey, use this data forcollaboration with us,
Absolutely, but also you can usethis in your internal systems
to be thinking about demandplanning and forecasting.
How have you sort of seen howbrands make this calculation of?
Hey, should we pay for data,and maybe not just in the
(11:28):
context of Luminate, but moregenerally, like there are
monetized POS data out there.
How do brands think about thisand how does this impact broader
financial considerations forcompanies.
Joel Beal (11:41):
You touched on two things.
Let me tackle the first onearound.
What do you use this data for?
Retailers are going to bemotivated to say, well, you use
this data in a limited way.
I want you to become a bettersupplier to me.
What does that mean exactly?
If I'm a brand, ideally I'musing this sellout data right
(12:01):
the consumption data to betterplan, to better understand how
much should I produce, whenshould I move those products so
that I can have it ready to meetthe demand that I expect to
come.
I think that's been a bit of atug of war as retailers trying
to limit what the data is usedfor.
For a brand, it's reallybeneficial if they can connect
it with a lot of other datasources and look at their
(12:22):
business holistically.
So I think that's one thingthat is playing out.
You're right.
Walmart Luminate Charter ismaking an API available.
They're kind of inherentlysaying this is going to be a
system to system conversationversus historically, portals
have been a human logging it onMonday morning and downloading a
bunch of data right Tomanipulate in Excel, really.
(12:43):
So I think you have that sideof it Now.
What's the calculation a brandis going to make?
We talk to hundreds of brandsabout this, and so we hear many
different ideas of how they wantto approach this where they're
willing to pay money, where theyaren't.
So I think one thing that isshifting, that I've certainly
(13:04):
seen trend over the last five,six years, is more of a
recognition that this is amust-have data set, not a
nice-to-have data set.
Brands, I think, arerecognizing more and more the
value of this data.
How valuable is it?
How much are you willing to pay?
Well, so much is going todepend on what your distribution
looks like and, as I mentionedearlier, if I'm doing hundreds
(13:28):
of millions of dollars worth ofproduct through Walmart, it's
going to be pretty valuable forme to be able to optimize that.
When another retailer comes tome and I'm doing a fraction of
that it's a lot harder tojustify those dollars.
So people have to decide wherethey want to invest and where
they're not going to.
(13:48):
It doesn't always seem thatretailers, I think, have maybe
had an honest assessment of that.
I think sometimes we'll seethat retailers seem to be
expecting a lot from suppliersthat don't even do a lot of
volume.
Logan Ensign (13:59):
When?
What other levers do the brandshave to pull, maybe to offset
these costs right?
I think it's going to beinteresting to see.
Obviously, you want to delivervalue if you're providing this
data to the brands right.
At the same time, there isn't aton of margin baked in to play
with, and so I think it isputting some brands in a tougher
position to kind of make anassessment.
Joel Beal (14:19):
I think this is for those who know retail, you think
of the world.
As I sell a product to aretailer, I make a margin on
that sale and then the retailersells it to the consumer and
they make their margin.
The way that that margin isdetermined, there are so many
different fees and costsassociated with that.
It is not I sell you a productat $5 and you go resell it at 10
(14:43):
.
And I make this margin and youmake that.
There is the price per unit,there's all the trade spend, all
the joint marketing we're goingto do there are slotting fees,
there are chargebacks anddeductions.
Ultimately, the finance team isgoing to look at that.
They're going to do there areslotting fees, there are
chargebacks and deductions.
Ultimately, the finance team isgoing to look at that.
They're going to say this ishow much we spend, this is how
(15:04):
much that retailer is giving usfor this much product and this
is our margin.
They're just different bucketsand that will be interesting.
Does this just move thingsaround in those buckets?
Do I say, okay, I'm now beingcharged for something that maybe
I used to get for free and, asa result, I'm going to cut my
trade, spend dollars a littlebit, or I'm going to change my
prices when I'm selling inwholesale, and I think obviously
(15:25):
retailers don't want that.
I think there's prettyestablished norms for what these
margins look like, and so Iimagine there's some reshuffling
of budgets really.
Logan Ensign (15:34):
Makes sense, Makes sense Maybe.
Last question here for you,Joel where's this headed right?
I think it's a developing story, lots of moving pieces.
We have sort of this bigrevolution around LLMs and AI
and big data.
So, yeah, where do you see thestate of POS data, this
relationship between suppliersand retailers?
What happens next and wheredoes it go from here?
Joel Beal (15:55):
I think there's a recognition that wasn't
necessarily there before of howvaluable it is.
I think people are finallygetting the value out of it that
they probably expected theywere going to get 10, 20 years
ago, but are realizing it now.
So it is becoming a core partof brands data strategy.
So they want this data right,they need this data.
Retailers are stepping up theirgame.
I think they are responding tothat and they see an opportunity
(16:18):
to monetize this and they'regoing to start charging more.
I think there is no doubtsWalmart is going to lead that.
I'm hopeful that you're goingto see the mechanisms, the
modernization of the technologyon that side.
I think that it's still verymuch to be determined.
How does the pricing play outon this?
So it's going to be afascinating couple of years.
(16:40):
I think it's very exciting.
We are moving forward.
That is the thing.
That's awesome is everybody'sgoing to get smarter.
This is going to benefitretailers.
This is going to benefit theirsuppliers.
We're going to have better,smarter supply chains.
But how it's getting paid foris going to play out in the
market.
Logan Ensign (16:59):
I'm probably similarly optimistic.
At the end of the day, it'sgoing to calibrate.
And then also, I think itrepresents a really exciting
modernization of okay, we'refinally going to give really
modern ways of sharing data andlikely even richer data sets,
which should help supply chainresilience, should help, I think
, in a lot of ways for the brand.
So exciting time we're inExciting times ahead.
(17:21):
Well, excellent, Joel.
Well, thanks for theconversation and we will end the
conversation here.
All right, Always fun, Logan.
From Alloy AI.
This is Shelf Life.
Today, we're featuring aconversation with my colleague
and co-host, joel Beal, ceo andco-founder of Alloy AI, about
(00:25):
how retailers are increasinglylooking to monetize their data
and how consumer brands arepaying steeper costs.
How far will this trend go?
Are the insights worth the cost?
What does this say about thestate of retailer-supplier
collaboration in 2025?
On every episode of Shelf Life,we answer questions like these
and more, with the help ofleaders across the consumer
(00:47):
goods industry.
I'm your co-host, logan Ensign,chief Customer Officer at Alloy
AI.
We'll be back with Joel rightafter this.
Alloy Ad (01:00):
As a consumer brand, you connect with dozens of
external partners and internalsystems to get a complete
picture of your business.
Each one is different.
Alloy AI makes it easy toconnect data from retailers,
e-commerce, supply chainpartners and even your own ERP,
then easily surface insights todrive sales growth.
Every day, brands use Alloy AIto see POS trends, measure
(01:21):
promotion performance and makebetter replenishment decisions
with their retail partners.
That's why we're trusted by BIC, crayola, valvoline, melissa,
doug Bosch and many more.
Get a demo at alloyai today.
Logan Ensign (01:37):
All right, Well excited to be here and talk all
things retail data.
Joel, To kick us off, I thoughtit'd be good to just orient on
what we're talking about here.
We want to talk all about thatretailer-supplier data sharing
relationship.
I know you've been in the spacea while.
Maybe you catch up on what typeof data we're talking about and
the history of data sharingbetween retailers and their
(01:59):
suppliers.
Joel Beal (02:00):
Yeah, I think it's a fascinating topic.
It's one I've been thinkingabout for years.
There's some interesting trendswe're going to jump into about
what is broadly called retaildirect data.
This is the direct feeds,essentially, that a retailer is
(02:31):
providing to their supply base.
So if I sell through saidretailer, they give me access to
data about how my products areperforming there.
And this space really gotkicked off by Walmart.
Walmart's been an innovator inretail in a lot of different
ways over the years.
In the 90s, they released asystem called RetailLink.
(02:52):
Retaillink was a data portalbuilt so that they could come in
self-service and download dataabout their product's
performance what's selling, whatprice points, how much
inventory do you have and overthe years it developed, it got
(03:13):
more and more robust and, aswe'll talk about a little bit
later, has now been replaced bythe newest system.
So once Walmart did that,they're a leader in this space.
Other retailers started tofollow, and so in the subsequent
decades, hundreds and againparticularly as you talk about
in the United States or inEurope are sharing data with
(03:47):
their suppliers in one way oranother.
But the way that they'resharing data, how they're
charging for it, thoserelationships, those are
constantly in flux and there's alot of trends that we'll talk
about today.
Logan Ensign (03:58):
And Joel, you'd mentioned, hey, mid-90s, Walmart
being innovative, starting toshare this data.
It clearly worked.
If other retailers followedsuit and they continue to do it.
Why did it work?
What were some of the benefitsor objectives of starting to
kind of expose all this data tothe?
Joel Beal (04:13):
suppliers.
First of all.
These retailers are workingwith thousands, maybe tens of
thousands, of differentsuppliers.
Right, they have a team, theyhave their merchants who are
working with them, deciding whatto buy, when to buy it, how to
promote it, et cetera.
The idea was how can we pushsome of that responsibility on
our suppliers?
So let's give them informationand then expect more from them.
(04:36):
And if I'm on the brand side,I'm excited.
I'm going to see more about howmy products are performing, I'm
going to have, hopefully, morepredictability and can be a
better collaborator.
So that was the mindset behindwhy they started to do it and I
agree, clearly it worked wellenough that pretty much every
retailer decided to do the samething.
(04:58):
Now, somewhat in parallel tothis I don't know the exact
timing off the top of my head,but you have companies that have
been in this world of buyingand selling point of sale data,
the notable examples being whathistorically was Nielsen, now I
think it's Nielsen IQ.
That was a whole industry wherethey were buying and
aggregating this up and kind ofpaying the retailers for it and
then charging suppliers.
(05:19):
So they were a middle person inthis.
They do other things as well,and so there kind of became
these two avenues forunderstanding really how your
products were performing Onethat was more of a survey of the
market and one that was muchmore direct, specifically about
your business.
A little more operationalnature, a little more real time.
Logan Ensign (05:37):
You kind of also alluded to, hey, other retailers
followed suit but maybe had avariety of strategies.
We'd love to just kind of talkto what we saw post retail link
to today, the differentstrategies and sort of what
retailers have kind of tried tomonetize this and how that's
looked, Something that I've seencontinually is retailers
believe this is an absolutetreasure trove of value right
(06:03):
All the information that theyhave about you and me and our
shopping behavior.
Joel Beal (06:07):
They spent a lot of time and a lot of money over the
years collecting this.
Think of all of the loyaltyprograms.
Why do those exist?
Why do we get discounts when weuse them?
It's because the retailer isable to get more and more data
about us.
In their mind has always beenhow do I make more money from it
?
How do I monetize this dataWhether you monetize it by
(06:27):
selling it, whether you monetizeit by improving your own
operations, marketing, sales, etcetera by using that has not
always been quite asstraightforward as probably
people initially thought decadesago when they started to do
this, and so I've definitelyseen that tension Retailers.
It does make them better.
It makes their suppliers better, it's, but they want to get an
(06:49):
ROI from all this investmentthat they've made.
And so, to your point, walmartreally came out and said we're
going to do this for freebecause we're going to use this
to create a more efficientsupply chain.
And I assume implicit in allthat was suppliers were giving
you something, and so we expectyou to reciprocate by giving us
better service and being able todrive down the price of
(07:11):
products, and that's really beenWalmart's MO right, that's how
they operate as business.
Other retailers, I think, havecertainly gone down the route
historically of saying, well,how do we monetize this more
directly?
Can we charge for this?
And so we've seen over theyears examples of retailers
doing this themselves, ofpartnering with software or
(07:32):
third parties to essentiallysell through them.
Kroger's done that, homeDepot's done that, the Walgreens
has done that Costco A lot ofretailers have taken that
approach as well.
So I think we've seen in thehundreds of retailers that we
worked with at Alloy, most ofthem have provided ways to get
the data for free, but not allof them.
Logan Ensign (07:53):
And what's interesting is those ones you
kind of ticked off, many of thempartnered with software
companies to kind of helpaccelerate that data sharing
right.
And so there's another sort ofchallenge for these retailers
probably to provide a front endand sort of the infrastructure
to be able to share the data.
You know Walmart went in-housebut other retailers looked to
partner with other softwareproviders to kind of make that
(08:16):
happen.
Joel Beal (08:17):
Right, you're absolutely right.
Some went in-house, some workedwith third parties, and we've
seen a lot of retailers changestrategies Charge, then decide
not to charge or not charge andnow start to charge.
So everyone's trying to figureout this dynamic.
The other thing I'll throw in Iteased it a little bit earlier
is e-commerce has changed, Ithink, the perception of how
(08:39):
this should work.
So I think Walmart was thefirst big shift and started this
movement.
As e-commerce grows, especiallywhen the brand themselves are
the ones shipping the product,they have to coordinate very
closely with the e-commercemarketplace or the retailer that
they're dropshipping through,whoever it is.
(09:00):
So they're going to know wherethe product's going.
They have to know when theorder comes in, they need to
know where to send it.
So I think e-commerce has kindof showed what a much more
tightly integrated supply chaincan look like, and now the more
wholesale, traditional part ofretailer is starting to catch up
with that, but it's taking time.
Logan Ensign (09:19):
What's going on with Walmart, luminate and
RetailLink so 90s we haveRetailLink come out a pretty big
shift over the last 12, 18months to Luminate.
What's going on?
Where are we at now?
Joel Beal (09:30):
Yeah.
So I think for years there wereall sorts of rumors about what
is Walmart doing with RetailLink.
I mean, two to three years agothey announced that they were
going to release a new platformcalled Illuminate.
That has officially happened.
There was about a yeartransition period.
Now RetailLink has been atleast discontinued when it comes
to sharing the point of sale,the inventory data, and now
(09:53):
everything goes through WalmartIlluminate, which actually was
just rebranded, I think, liketoday, walmart Centilla.
So the big shift here is Walmarthas continued to provide a free
tier, but they're reallypushing folks to use what's
called Charter, which is theirfor a fee, part of Luminate.
(10:13):
Now, the great news here isit's a robust, modern platform.
They're making it better allthe time.
They're investing a lot.
We really love what we see.
I think it's bringing retailinto finally, the 21st century
here.
But they charge for it and youget a much more limited thing if
you go on the basic side.
So what does that mean?
(10:34):
Well, walmart I think publiclyhas stated that it's going very
well.
A lot of brands are signing up.
They're seeing a lot of growthfrom that.
I think we're going to see thiscascade now of other retailers.
Try to follow suit.
Of course, the big question isWalmart does $500 plus billion a
year in revenue.
When a retailer that's doing $5billion or $10 billion a year
(10:56):
in revenue tries to do the samething, you know, are they going
to have the same amount ofleverage over their suppliers,
etc.
And I think that's what'splaying out right now.
Logan Ensign (11:06):
And to your point that modern sort of data access
feels like Walmart is moreembracing.
Hey, use this data forcollaboration with us,
Absolutely, but also you can usethis in your internal systems
to be thinking about demandplanning and forecasting.
How have you sort of seen howbrands make this calculation of?
Hey, should we pay for data,and maybe not just in the
(11:28):
context of Luminate, but moregenerally, like there are
monetized POS data out there.
How do brands think about thisand how does this impact broader
financial considerations forcompanies.
Joel Beal (11:41):
You touched on two things.
Let me tackle the first onearound.
What do you use this data for?
Retailers are going to bemotivated to say, well, you use
this data in a limited way.
I want you to become a bettersupplier to me.
What does that mean exactly?
If I'm a brand, ideally I'musing this sellout data right
(12:01):
the consumption data to betterplan, to better understand how
much should I produce, whenshould I move those products so
that I can have it ready to meetthe demand that I expect to
come.
I think that's been a bit of atug of war as retailers trying
to limit what the data is usedfor.
For a brand, it's reallybeneficial if they can connect
it with a lot of other datasources and look at their
(12:22):
business holistically.
So I think that's one thingthat is playing out.
You're right.
Walmart Luminate Charter ismaking an API available.
They're kind of inherentlysaying this is going to be a
system to system conversationversus historically, portals
have been a human logging it onMonday morning and downloading a
bunch of data right Tomanipulate in Excel, really.
(12:43):
So I think you have that sideof it Now.
What's the calculation a brandis going to make?
We talk to hundreds of brandsabout this, and so we hear many
different ideas of how they wantto approach this where they're
willing to pay money, where theyaren't.
So I think one thing that isshifting, that I've certainly
(13:04):
seen trend over the last five,six years, is more of a
recognition that this is amust-have data set, not a
nice-to-have data set.
Brands, I think, arerecognizing more and more the
value of this data.
How valuable is it?
How much are you willing to pay?
Well, so much is going todepend on what your distribution
looks like and, as I mentionedearlier, if I'm doing hundreds
(13:28):
of millions of dollars worth ofproduct through Walmart, it's
going to be pretty valuable forme to be able to optimize that.
When another retailer comes tome and I'm doing a fraction of
that it's a lot harder tojustify those dollars.
So people have to decide wherethey want to invest and where
they're not going to.
(13:48):
It doesn't always seem thatretailers, I think, have maybe
had an honest assessment of that.
I think sometimes we'll seethat retailers seem to be
expecting a lot from suppliersthat don't even do a lot of
volume.
Logan Ensign (13:59):
When?
What other levers do the brandshave to pull, maybe to offset
these costs right?
I think it's going to beinteresting to see.
Obviously, you want to delivervalue if you're providing this
data to the brands right.
At the same time, there isn't aton of margin baked in to play
with, and so I think it isputting some brands in a tougher
position to kind of make anassessment.
Joel Beal (14:19):
I think this is for those who know retail, you think
of the world.
As I sell a product to aretailer, I make a margin on
that sale and then the retailersells it to the consumer and
they make their margin.
The way that that margin isdetermined, there are so many
different fees and costsassociated with that.
It is not I sell you a productat $5 and you go resell it at 10
(14:43):
.
And I make this margin and youmake that.
There is the price per unit,there's all the trade spend, all
the joint marketing we're goingto do there are slotting fees,
there are chargebacks anddeductions.
Ultimately, the finance team isgoing to look at that.
They're going to do there areslotting fees, there are
chargebacks and deductions.
Ultimately, the finance team isgoing to look at that.
They're going to say this ishow much we spend, this is how
(15:04):
much that retailer is giving usfor this much product and this
is our margin.
They're just different bucketsand that will be interesting.
Does this just move thingsaround in those buckets?
Do I say, okay, I'm now beingcharged for something that maybe
I used to get for free and, asa result, I'm going to cut my
trade, spend dollars a littlebit, or I'm going to change my
prices when I'm selling inwholesale, and I think obviously
(15:25):
retailers don't want that.
I think there's prettyestablished norms for what these
margins look like, and so Iimagine there's some reshuffling
of budgets really.
Logan Ensign (15:34):
Makes sense, Makes sense Maybe.
Last question here for you,Joel where's this headed right?
I think it's a developing story, lots of moving pieces.
We have sort of this bigrevolution around LLMs and AI
and big data.
So, yeah, where do you see thestate of POS data, this
relationship between suppliersand retailers?
What happens next and wheredoes it go from here?
Joel Beal (15:55):
I think there's a recognition that wasn't
necessarily there before of howvaluable it is.
I think people are finallygetting the value out of it that
they probably expected theywere going to get 10, 20 years
ago, but are realizing it now.
So it is becoming a core partof brands data strategy.
So they want this data right,they need this data.
Retailers are stepping up theirgame.
I think they are responding tothat and they see an opportunity
(16:18):
to monetize this and they'regoing to start charging more.
I think there is no doubtsWalmart is going to lead that.
I'm hopeful that you're goingto see the mechanisms, the
modernization of the technologyon that side.
I think that it's still verymuch to be determined.
How does the pricing play outon this?
So it's going to be afascinating couple of years.
(16:40):
I think it's very exciting.
We are moving forward.
That is the thing.
That's awesome is everybody'sgoing to get smarter.
This is going to benefitretailers.
This is going to benefit theirsuppliers.
We're going to have better,smarter supply chains.
But how it's getting paid foris going to play out in the
market.
Logan Ensign (16:59):
I'm probably similarly optimistic.
At the end of the day, it'sgoing to calibrate.
And then also, I think itrepresents a really exciting
modernization of okay, we'refinally going to give really
modern ways of sharing data andlikely even richer data sets,
which should help supply chainresilience, should help, I think
, in a lot of ways for the brand.
So exciting time we're inExciting times ahead.
(17:21):
Well, excellent, Joel.
Well, thanks for theconversation and we will end the
conversation here.
All right, Always fun, Logan.
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