Improving Profitability with 852 Transaction Information

The EDI 852 Product Activity transaction is used to transmit point of sale information from retailers to their suppliers. The 852 data provides valuable insight into the popularity of items. Used properly, it can not only improve the retail experience for customers by ensuring that the most popular items are always in stock, it can also improve profitability.

How it Works

852 transactions are sent using a standardized message format. However, each retailer uses the standard format according to their requirements.  The transaction is completely electronic and allows retailers to offer POS (Point of Sale) data to their suppliers.

The 852 transaction utilizes a very detailed and sophisticated file format that offers a wealth of information.  The data can enable suppliers to see how much of a given product is left in stock, how much the retailer has recently received, and how well the item has sold.  The information can be summarized by store and by distribution center. This information can also include forecast measures.

How the Information is Used

The 852 transaction is used in various configurations by retailers. When suppliers and retailers have a good working relationship, both of them can work together to make sure that the POS data is being used to its full potential.

Stock outs can be prevented. Suppliers can suggest orders to retailers who may be running low on the product that their customers want the most.

Supplier production can be more effectively planned. Advertising dollars can be allocated to where they are most needed.

The 852 transaction can be used for VMI (Vendor Managed Inventory) relationships. In a VMI relationship the supplier is responsible for monitoring inventory levels and then replenishing product without prompting by the retailer.  Purchase orders are not used. Instead the sales data in the 852 is employed to determine when new shipments should be sent.

Popularity

Only about 20% of retailers use the 852 transaction to work with some of their suppliers.  Given the benefits, why aren’t more retailers involved? The reasons vary.

In some cases the supplier and the retailer are also competitors because the supplier may also sell their product on their web site and through etailers such as Amazon.  Where the product is selling, seasonal demand, and the speed of inventory turns can be competitive intelligence.

In other cases, the retailer may consider managing their supply chain to be a competitive advantage and they do not want their supply chain information to leak out to other retailers.

Sometimes the retailer is capable of providing 852 information, but will require the supplier to make a business case for why the retailer should expend resources to generate and send the 852 data. Not all suppliers are allowed to participate.

Retail Examples

Target recently started bringing its Canadian stores into compliance with EDI standards and using the 852 data format is among the optional elements of this system that Target had put in place.

Kroger, Safeway, Schnucks, Wegmans, and other grocers commonly use the 852 transaction with their VMI suppliers and to provide sales data.

Other companies who sometimes provide 852 transactions to their suppliers include drugstores CVS, Rite Aid, and Walgreens; home improvement stores Ace Hardware, Lowes, and Home Depot;  and retailers Amazon, Belk, Best Buy, Bloomingdales, Dollar General, Family Dollar, JC Penney, Kmart, Macy’s, Meijer, Modells, NEXCOM, Office Depot, Office Max, Petsmart, REI, Sam’s Club, Sears, Target, Toys R Us, Walmart, and Zellers.

Working with the Data

The 852 data can be converted to common formats, such as a CSV or XML file. CSV files can be used with Excel. Excel provides spreadsheet functionality for organizing and interpreting the data.

CovalentWorks can help small businesses to get the most out of their data by providing technology that helps to analyze and understand that data so that it can be leveraged for better performance. For many businesses, leveraging 852 POS data can help them transform their business process into one that is more profitable and more efficient.

Improving Profitability with 852 Transaction Information by

Leave a Reply

Your email address will not be published. Required fields are marked *