EP 211: De-Risking the Intelligence Gap in Retail Analytics

Special Guest: Jay Hakami, CEO and Founder, Skypad, CEO, SkyIT Group 

What’s a retailer’s worst nightmare? Not having the right retail insights and analytics to manage inventory. In an era where retail success hinges on speed to insight, the industry faces a critical intelligence gap stemming from outdated data sharing practices between retailers and brands. Operational efficiency can be crippled by inventory misalignment, yet so many businesses still struggle with the lack of accurate, granular and timely visibility into inventory levels that leads to stock discrepancies. What’s more, inefficient communication and lack of transparency between brands and retailers causes delays in inventory replenishment and excess stock in some locations while others face shortages. Join Shelley and Jay as they take a deep dive into the critical role of data transparency and communication between brands and retailers, examining how top performers are bridging the information divide. Speed to insight is the new currency in retail performance.

For more strategic insights and compelling content, visit TheRobinReport.com, where you can read, watch, and listen to content from Robin Lewis and other retail industry experts, and be sure to follow us on LinkedIn and Twitter.

Transcript

Transcript By Descript:

 What we're seeing is that the predictive sometimes is way off because there's a disconnect between what the buyers are seeing and what the sellers, meaning the brands are seeing. 

Retail Unwrapped is a weekly podcast hosted by Shelley Kohan from The Robin Report. Each episode dives into the latest trends and developments in the retail industry. Join them as they discuss interesting topics and interview industry leaders, keeping you in the loop with everything retail.  

Hi, everybody, and thanks for joining our weekly podcast. I'm Shelley Kohan. I'm very excited to welcome Jay Hakami, who's the founder, president , and CEO at Sky IT Group, which is the home of the Skypad company. It is a leading SaaS platform for global retailers and brands.  you currently are partnering with many large retailers like Saks Fifth Avenue, Neiman Marcus Group, Nordstrom's and alike, as well as over 3,000 brands across the globe.

So I am so thrilled to have you on Retail Unwrapped Podcast. We're going to be talking about what I really think is the retail intelligence gap, why some retailers are winning and others are struggling. Thanks And we're going to take a deep dive into the critical role of data transparency, communication between brands and retailers, and really examining how the top performers are bridging the information divide.

And I would love to jump right into our first topic because I think it's very important. And that is the bottleneck, the inventory bottleneck. I can't believe our industry has yet to figure this out. So tell us what's happening with inventory bottlenecks and what is the misalignment there? Well, there is, there's a, there is a misalignment in the way retailers share data with their brand. 

A couple of issues here, number one, many of them are still using 1960 technology, which is EDIH 52,  which is a very limited data set, and it's not a granular or granular,  data that is being sent to the brand. With that said, it's very time consuming. For the brand to consume that data and make sense of it and let's multiply that that every retailer has their own way of sending data.

One has a portal. One is one is Excel  spreadsheets One is PDF  that combination  provides a completely inefficient way. Between,  for the communication between the buyers and the sellers.  So, with that, there's so many, I mean, the inventory misalignment is one. The replenishment is another issue. Identifying what's moving, what's not moving.

It's an issue that resonates with the retailers, as well as with the buyers, as well as with the brand. So this is the issue with the bottleneck that we are seeing in the industry. It's crazy. And I love how you said, you know, I, I feel like it's a cruel slap in the face for retailers, like wake up already because you can't continue  going along this route that you're going on.

And when we talk about, you know, if you don't have transparency and you don't have good communications, You know, what does that then do to inventory replenishment and what's that do for sales? And you know, what's the outcome and how, you know, what, what's happening out there with inventory?  Go ahead. No, no, you're, you're, you're right on the, you're right on it because what's happening is the collaboration between the buyer and the seller, the merchant team is off. 

And you know, when, when, when you can, when you know how your products are moving,  Two, three weeks after the fact, it's not, you don't, you don't, you don't react. This is not too late. It's way too late. Exactly. So you've got, you guys, you know, it's size runs that are missing. You've got colors that are doing very well in Detroit and then doing very poor in Florida and nobody's making any moves to change that.

So these are the misalignments. These are the issues that we're seeing between the retail and the brand.  So let me ask you a question. So I've been hearing about predictive analytics for over a decade, and normally we hear it, we're a little bit behind the rest of the industries. You know, what's happening?

Are a lot of retailers out there using predictive analytics? Like what's going on with that? Well, they're trying, for sure. They're trying to, to get ahead of that. But, you know, the way I looked at it, it's the communication. Between the B2B, between the businesses, between the retailer and the brand that lends itself to the, replenishment and to the predictive on the floor, meaning on the, where the consumer is at. 

So I, I, what we are seeing is that the predictive sometimes is way off because there's a disconnect between what the buyers. And what the sellers, meaning the brands of things,  therefore, the predictive is, is off,  by, by, by far. And that's the reason we're having so much, you know, excess inventory in one place and shortages on the other side. 

Yeah, that makes sense. I think you can, talk to us a little bit about a case study. Calaris is a company you work with. Can you tell us, maybe just give us a story about that? What happened there? Yeah. Calaris, as you know, is a large, one of the biggest shoe companies in the U S and, They had a, they had the coin actually a beautiful phrase from one of their executive that I love.

It's speed to insights.  speed to insights, meaning that he's able now, which I've had, he's able to actually take a look at almost real time at what's going on. In the, in the department stores, they're in and react faster. In some cases, they know more about how the inventory is moving in the department stores than the actual buyers in that department. 

So that's one of the things that was able to do. And you have to remember, you're talking about a. A company with so many different brands that it needs to juggle all this information between their, you know, between the retailers they're in. So, we, we, we, and we are perfecting what we're doing all the time with them, because they have more desire to see more insights about their product down to the size, down to the granular size, you know, size level.

So, that's definitely a beautiful write up that we had not, not too, not too long ago, about a year ago, I think. That was so, so forthcoming with about the challenges they've had and how they. 

That's a great example. So I want to go back to something you said earlier, which is this miss sales and replenishment opportunities. And maybe you can talk a little bit about, you know, the out of stock situation for one and two replenishment replenishment is such an important part of our business model. 

Absolutely right, Shelley.  let me tell you something. If you don't know where you're going, you may just get there. Right? and this is this is exactly what's happening with replenishment. I mean, we have situations where,  the, the retailer is not reacting fast enough. They have a shortage of a blue shirt.

Just taking example, a blue short brochure in Detroit. It's store number five, five, six, but the retailer doesn't even know about it. And the brand calls them up and say, by the way, I got 50 or more of these shirts sitting in my warehouse. I can ship it to you right now. This is the change of being from reactive to proactive, enabling the brand to see what's going on.

Missing the stock of what is the shortage and the ability to pull up the buying thing. I've got this information. I got this. I've got this product sitting in my warehouse. Let's get a chip. Let's get it over to you. And I think that also enhances the relationship, if you will, between the buyer and the seller because the, the, the seller is becoming a lot more proactive. 

With the buyer.  So that's, that's one thing about the replenishment that I wanted to mention to you about over, you know, over, you know, sustainability and having too much product on the shelf, obvious if you're buying too much and it's not selling, you got to mark it down and it's marking down everybody loses. 

So, the idea is just to write inventory at the store at the right time.  to be able to sell it at full price.  It's interesting, Jay, and let me know if I'm not stating this correctly, but so what I'm envisioning is, so you're really able to advocate for more of a pull mentality in terms of supply chain versus push.

So in other words, in the scenario you mentioned about the blue shirt, you know, you can wait all day for that shirt to come. but why not let the brand, you know, Push really just take that information and get it into the stores quicker. Is that what you're saying is it's more like you're pulling it in as opposed to sitting there waiting for it to happen in a push supply chain method, right?

Let's remember that replenishment benefits both the retailer and the brand. Of course. So, I mean, it's both sides who wish to get replenishment, you know, going on relatively quick. Right? I mean, if that store doesn't have a stock and it's moving like, you know, like hot  cakes, why not replenish immediately? 

And by the way, if those products are not selling in one location, why don't we move them to a location that does that?  This communication is readily available in Skypad  where the buyers, the retail buyers, and the brand sellers can actually see that together, have that conversation on Monday and take action on Monday afternoon. 

It's like real time visibility into inventory, right? It really is.  What we do actually, if you think about it, Sales performance, product sales performance, and inventory position. These are the two elements that we bring with Skypad. These insights enable both the buyer and the seller to be more reactive to the marketplace, which is, again, the consumer. 

Yeah, and I think you did some work with Saks on this, didn't you? Yes, we have a beautiful right up with tax Swift Avenue. No, it's going to be global soon. But yes, that's one of the retails that we partner with where we share. We share data with their brands  and they actually had a beautiful write up that says that. 

You know, we actually look at predictive. We're looking at how our products are selling, and then we start having this dialogue with the brand. And by the way, they're both looking at the same version of the truth, right? That's looking at the same platform, which enables both of them not to make 15 calls back and forth every week about it. 

Self positions,  inventory position and sell through, performance, but they're able to make decision immediately and then take action.  And that that whole scenario is actually a perfect,  perfect fit for both the brand and the resale.  Awesome. So we talked a little bit about the bottleneck and we talked a little bit about making sure inventory is in the right place.

So now I want to skip over to something that's really important and that is the ability to react to market trends and really start looking at how can we better get inventory in front of demand? So do you have some thoughts about that? Absolutely. I, it seems, and we both know that the retails and the brands have invested some humongous amount of time, efforts, and obviously dollars in their B2C.  

and, and they kind of neglected in my humble opinion, the B2B side of it.  So basically they were able to now sell more to direct to the consumer, whether it's online, through marketplaces, through dropship, whatever, but the communication with the brand, their suppliers. What is lacking? And this is where we come in and we fix that.

That issue. Not only that, let's not forget that the retailer, the traditional brick and mortar retailer, only a few years ago, only sold in the store. Today, they have a marketplace.  Today, they have a drop ship. Today they have online, they have partnerships, all these data sets, it's very difficult for the retailer to capture all that data and then present that back to the brand.

That's exactly what Skypad does with its retail vendor analytics platform. When enabling the retailer to distribute this information securely and clearly and concisely into the brand, so that brand can actually make, make decisions with the retailer on the product.  That's great. I think I read a story about a denim trend.

Can you tell our listeners a little bit about what happened in that scenario? I think that's a great example. Too much detail on this, but, let me tell you that, you know, sometimes  And you see the, the, the, you know, you see the things are moving very fast based on, on, on, you know, on the media and so on.

But when you get down to the nitty gritty, you look at the data, you see that this is not exactly the way it works, but, you know, away from this by media, right away from it. But what we see on videos, what we see on, on, on,  in media is in general, but when you take a look at the actual data. You've seen that those trends are not actually accurate,  because the hype of the influencers or the hype that we are seeing is not supported by the data.

And therefore, all of a sudden, you know, if you take an action based on the media, you're not taking action based on reality, in some cases, not all cases, but in some cases.  Interesting. We are actually, like I said, we are providing the version of the truth. This is the actual result of how your products are selling or not in these locations. 

Now you can make a decision how you want to, to do your assortments. How do you want to do the distribution? And so on and so forth.  Yeah, that's interesting. So before we close out our podcast here, is there any other key points or any other things that you would like our listeners to know?  Well, a couple of things.

Number one,  the, there's obviously a dynamic change that's happening in the retail industry right now. And with the, with the introduction of AI, it's going to become even bigger.  and I think we're, we're, we're actually starting to work on AI, with working on our own products. Marketplace as well.

But the ability to make things to allow insights to come in and flow faster,  is actually a benefit that both retailer and brands can see.  and we are facilitating that with Skype app today, but it's gonna get even bigger once we apply AI.  To the terabytes and terabytes of sales data that we capture on a weekly basis. 

So I think the best is still yet to come.  Oh, that's so exciting. And I love the work you're doing. And, you know, I always love it. My big goal for the industry is to make retailers, better retailers and brands, better brands. So I applaud the work that you and your company are doing. It sounds great. How do our listeners find you or Skypad?

What's the best way for them to find you? Well, our website is, www sky it  group  com.  they can find us there.  my email address, I'll share that with you, the letter, J-H-A-K-A  sky group com.  and we're very, we respond very quick. customer support is an amazing group.  our, our  sales team, it's not even itself.

It's really, people from the industry.  really are attentive to, and they understand the terminology, they understand the issues. We don't take real salespeople. We take people from the industry, which actually benefited us. Many of them actually from SIT, Shelley.  SIT, yes. So they're across the street, as you know, and it's, many of the folks here, I think like 30 percent of the folks here are, have had something to do with SIT. 

So again, if you want to find us, we're on 30th and 7th Avenue.  we've been here for many years, and we're hopefully going to be here for many more. And, we are looking to continue innovating, for the retail and for the brand side, for the benefit of the consumer.  Well, thank you so much, Jay. It's been an absolute pleasure talking with you today.

And thank you for solving one of our biggest conundrums in the industry, which is inventory management.  for our listeners, next week, we have a very exciting podcast. We're going back and we're having our expert from Ohio state university, Rebecca Matheny. Who's going to be talking about our second kind of follow up conversation on circular economy and sustainability.

 So you don't want to miss that one. Also for our listeners, please provide us feedback, go to the contact us section of the Robin report. com. Give us your feedback. We'd love to To hear from you. So thank you, listeners. Thank you, Jay. And,  let's make our industry better.  Thank you for listening to retail unwrapped.

 We'll be back in one week with another podcast. Please subscribe on Apple podcasts, Spotify, or any podcast service. If you have questions, ideas for a podcast or anything else, please contact us via TheRobinReport.com.