The worlds most valuable resource is no longer oil but data...

On your marks, get set, Go......

Justin Newman is the Chief Executive Officer of VTH (Virtual Timber and Hardware), which provides e-commerce and software solutions, for the hardware industry, powered by Vesta Central. Mr Newman is an entrepreneur with over 25 years industry experience, working with independent retailers and buying groups, building systems and solutions that help traditional retailers transition to an Omni channel environment. As founder and CEO of Click-n-Build, he is passionate about giving the independent hardware retailer new opportunities online.

Talking technology, and the benefits of the internet and ecommerce to members of Australian timber and hardware industries is sometimes a challenging process. I often find myself saying, “Don’t hate me. I didn’t invent the internet”. So what do I mean by this? The truth is that the internet is both an opportunity and threat to the traditional model of many long-standing businesses.

My discussions with retailers frequently turn to what competitors could or are doing to disrupt their old-style channels to market, by leveraging ecommerce. Before long the discussion also turns to me being told that the hardware industry is safe from such threats and we do not need to be concerned for a very long time.

But as an industry we need to ask ourselves, can we put our heads in the sand and confidently say that the hardware industry does not need to explore the threats and opportunities the internet offers? Hold back your answer for just a moment as the purpose of this article is to try and explain to you that in order to explore the opportunities and threats, you first need to look inside your business and answer some questions.

Firstly, you are not in the hardware business, you are in the business of big data. I can see people turning to the next page now as they say, “this guy has lost it”. Stick with me I think I can convince you. It is very easy for retailers to go to work each morning and walk past the shelving loaded with tools and hardware items, or through the timber racks and say, “I am in the building supplies business”. But if you buy into my theory, think about that same walk and look at each of those products as piece of data. The hardware range you sell is thousands of unique pieces of data, and are also parts of data sets, that relate to other data sets and so on.

Are you still with me? If you have been asked to complete a quote for a customer on just one product, think about the vast amount of data you process just to respond to that quote request including: what is the customer asking for; what is the part number so you can look it up in the system; what is the supplier’s code so the correct product is ordered; what is the cost; is there a delivery fee from the supplier; is there a rebate; what is the competitor’s price; what are the payment terms; what are the costs to supply this and what products could be sold along with this product? This is big data and leads to multiple sources all relating to a single product that you have been asked to quote on. Far too often we rely on the processing power of our staff or ourselves, not on the processing power of our business systems to handle all this data. We compute all of this in our head, over and over. Do you have a headache yet?

It is time to get ready If you are still reading this, then I assume you are at least a little intrigued by what I am proposing. Which leads me to introduce the concept of ‘getting ready’. By ‘getting ready’ I simply mean that it is time to start preparing your business for what is coming down the pipeline at you. As I said earlier, some of what is fast approaching are threats to your traditional business model, but with the threats are also opportunities and you need to be ready to take advantage of them. Why am I so focused on data? Because data is the new oil. The pipelines are all turned on and it is heading straight for you. But just like oil, data is not any good unless it is refined. It is only until you start refining it that you can use it to capitalize on the opportunities and compete against the threats the internet poses to your business.

Why do need to get ready?

Over the past decade it seems organisations in most industries have changed more than any other.