Evan Schuman's StorefrontBacktalk

Kraft Foods, Nestle and Procter & Gamble are now able to synchronize item data with Metro Group stores in Russia, a collaborative effort being touted by the players as a “landmark” deal that illustrates the rapid expansion of the Global Data Synchronization Network (GDSN).

There’s no question the global data sync effort, in which manufacturers share product information with sellers through GDSN-certified “data pools,” is gaining ground. More than 3.1 million items are now registered in the GDSN, according to figures provided by 1Sync, the world’s largest data pool and the one used by Kraft, Nestle and P&G, said Varsha Anand, a company spokeswoman.

The GDSN had 1.1 million items registered in December 2006. A year later, there were 1.9 million items. The 1Sync data pool had 19 countries connected in 2006 and 27 in 2007; 37 countries are currently connected, Anand said.

But not all industry observers are sold on GDSN. For example, Retail Systems Research Managing Partner Paula Rosenblum said she remains skeptical about the true ROI of the practice. “Global data sync has been around awhile,” Rosenblum said. “It’s a good and a noble practice. If everybody has clean enough data to make it work, it’s very handy and useful.”

But Rosenblum pointed to the difficulties and expenses encountered by many companies in cleansing their data. Then there’s the issue of price disclosures. Although Rosenblum noted that retailers are supposed to pay the same price as their competitors, “this is not well-enforced.

“One of the reasons the GDSN never quite took off (particularly in the United States) is that, along with the other product data, the item cost has to be included,” Rosenblum said. “The problem is that not everybody pays the same thing. Therefore, it gets tricky.”

GDSN Expanding Fast Internationally

As would be expected, 1Sync Director of Industry Relations Oliver Siard said that he is bullish about GDSN. Nevertheless, he said many major U.S.-based retailer CIOs might be unaware of the way data syncing is gaining ground. “The biggest surprise is that the GDSN is expanding so fast internationally,” Siard said. “In the last three years, it’s been very much expanding in Europe, with the exception of Russia.”

Germany-based Metro Group uses the SA2 Worldsync data pool. Although Metro Group was involved in data syncing in Russia prior to the Kraft, Nestle and P&G deal, activity was limited to the SA2 Worldync data pool and to transactions inside the country. Metro and the three manufacturers using the 1Sync data pool cooperated “hand-in-hand” to bring Metro’s Russian stores into the global GDSN, Siard said.

He added that the toughest element of GDSN rollouts in new territory is coming to agreement on the business terms. Although the basic infrastructure is necessary, technology is rarely the big stumbling block. “What this entails is not only the technical pieces,” Siard stressed. “That’s the easiest part. The biggest challenge is the business side. Once you agree on the business terms, plugging in the technical side is fairly easy.”

Now that those terms are in place, it will only be a matter of time before other manufacturers that do business with Metro Group stores in Russia follow the data syncing leads of Nestle, Kraft and P&G, Siard predicts.

“They are the trailblazers,” Saird said. “These are the guys that lead the way. All medium and small manufacturers can read this and say, `Now I can actually reach out to Metro.’ If they want to sync with Metro in Russia, the business terms have already been agreed on. They can just plug and play.”

In a joint statement describing the Russian GDSN expansion, the involved companies described Russia as “one of the fastest-growing European markets” and one that offers significant growth potential for suppliers and retailers. “This gives us the ability to get our products to the store shelf faster,” Kraft Foods Russia Sales Director Janna Kouchina said in the statement. “We hope that more retailers will adopt this process, giving us the ability to experience similar benefits across our supply chain globally.”

Metro Group currently synchronizes GDSN data, via SA2Worldync, in Germany, Poland and the United Kingdom and is in the process of expanding the synchronization capability to other European nations including Denmark and Hungary.