COVID-19 has forced seismic changes across the economy, with dire consequences for many businesses. Remarkably, however, it also encouraged an increase in entrepreneurship, with Companies House recording a start-up boom in the UK. 810,316 new start-ups were registered in the April 2020-2021 fiscal year. But, now that restrictions have eased and the economy is on an uncertain path to greater normalcy, can start-ups remain competitive and continue to be sources of innovation? It seems likely that one of the factors in creating and disrupting new small businesses will be their ability to use data and IT to optimize their business models.
In order to carve out a place for themselves in the modern economy, start-ups must be smart, streamlined, and unique. At the heart of this is the collection and use of supply chain data and the digitization of processes.
In a data-driven market, start-ups will need to use every tool at their disposal to monitor everything that is happening within their business and track consumer behavior so that they can adjust their practices accordingly. This kind of agility and the ability to react quickly to new information is essential for start-ups to stay ahead of their larger competitors, who may face significant challenges when making adjustments. within larger and heavier supply chains and systems.
Collaboration and data connectivity between the different actors of the supply chains will be a crucial element of the IT strategies of start-ups. According to a Coresight study, 40% of brands identify better collaboration as a cause of improved inventory management and sales. However, the same research has shown that many companies still do not feel that there is enough common thinking between partners at different points in the supply chain. It is important to understand what types of barriers sometimes prevent better sharing and use of data.
Common barriers to data sharing
- Identification of key data. It takes time and skill to select the most relevant and important data to share with other parts of the supply chain and these tasks are often not as prioritized by start-ups as those looking for more. directly profit.
- Build trust. Sharing data between companies and with consumers has a positive impact on the trust within these relationships; however, this type of transparency is difficult to achieve because it requires drastically changing people’s habits and connecting parties who previously had little contact and communication with each other.
- Legal issue. Sharing and managing data involves a complex landscape of laws and regulations that can discourage small businesses that do not have in-house legal teams or large budgets set aside to hire lawyers.
- Security and intellectual property issues. Startups may fear that sharing data with other parties will leave them vulnerable to exploitation, that their ideas will be stolen by other companies, or that their financial information or their customer details will fall between the wrong ones. hands.
Factors that encourage data sharing
- Consumer trends and demand: Modern consumers demand more transparency and openness from the companies they spend their money with, especially when it comes to issues of sustainability and corporate social responsibility.
- Law and regulations: Changes in laws and regulations increasingly require companies to share more information with consumers and authorities, and this trend is expected to continue.
- Medical considerations: Medical concerns such as the medical and health safety of cosmetic and pharmaceutical products or the allergen content of food products require data sharing between different parts of the supply chain, and between companies, authorities and the customer.
Build consumer engagement with transparency on key issues
Of course, not all data is suitable for sharing, and it is far from necessary for start-ups to publicly share all of their information. However, it is certainly true that many consumers crave product data, whether for environmental, health or ethical reasons.
Sharing relevant data should lead to greater trust and a better relationship between consumer and brand. Sustainability issues are high on the agenda, especially for young clients; Start-ups that collect and share data on sustainability, such as the amount of water they use and the amount of carbon they emit in the manufacture of their products, stand out for their transparency and reliability. .
It’s not just customers who benefit from increased transparency and data sharing. Within start-ups and small businesses, it is crucial that there is an environment of openness and honesty between management and employees. This helps build trust and loyalty and ensures that everyone within the company is on the same page.
Sharing data is also important to ensure quality assurance and global compliance – and to help reduce (and hopefully eliminate) any legal risk, especially in heavily regulated industries.
Adapt quickly to market trends and stay ahead of the competition
As a start-up, developing greater agility and adaptability is a crucial way to stay competitive. Changing trends and levels of sales performance are first detected through data analysis and business intelligence systems such as customer relationship management (CRM) and product lifecycle management software (PLM).
By sharing data in real time, brand owners, product developers and category managers can use it to take corrective action to existing products and lines. This ability to react quickly is amplified when there is a strong relationship between different parts of the supply chain.
They can also identify opportunities for new niches to target, or ways to optimize customer behavior. Sharing sell-in and sell-out data is very useful in detecting consumption trends, so that the supply chain and production teams can react accordingly.
Better targeting with production and line planning
The more information that can be shared about sold-out products, product lines and product types – as well as geographic and demographic data – the more start-ups can optimize their range planning, seasonal offerings and their promotions to develop relevant products for consumers.