Why Big Brands Are Embracing Direct Connections to Power the Future of Retail

Suresh Kumar, Walmart’s global chief technology officer and chief development officer, says, "We’re in a new era of retail defined by profoundly personal shopping experiences. Each shopper defines how, where and when they obtain goods, and context is key. The 'why' behind the purchase. Retailers must predict shoppers’ needs, reduce decision-making, and enable highly personal experiences. Future retail success depends on how well we anticipate and meet these evolving expectations."

Suresh’s quote, featured in the company’s first annual “State of Adaptive Retail” report, is a clarion call for retailers and brands that want to win tomorrow’s consumers. He understands the need for accurate, complete, continuously refreshed data that will be required to power that adaptive ultra-personalized experience — particularly when it comes to the product data that forms the foundation of the entire consumer shopping journey.

Last year alone, Walmart, Target, and Amazon.com combined changed their content requirements more than 1,000 times. The world of "Adaptive Retail" that Walmart describes will require the continuous exchange of optimized product data, personalized to serve multiple shopper personas, a process that needs to be as automated as possible and propelled by generative artificial intelligence to meet the scale of retailers’ demands.

To power this future, leading retailers, such as Walmart, Kroger, and Albertsons, are investing heavily in the technology to power the automated exchange of product information through direct API-powered connections. Walmart recently launched its new Omnispec API, a new submission process for suppliers that combines all of the data requirements for both online and brick-and-mortar item setup.

Some of these APIs are being designed as OmniAPIs, a single connector that collects the data needed to prepare supply chains and warehouses for the product but also the data needed to support the omnichannel shopping habits of today’s consumer. This includes extensive marketing content, rich media, and other content that drives SEO performance and improves conversion rates.

Why Direct Connections, Why Now? 3 Forces Compelling Change

1. E-Commerce Growth and Retail Media

According to an analysis of U.S. Census Bureau data by research firm Stratably, 2024 revenue from digital is projected to grow 8.4 percent in the U.S. market; this is compared to in-store growth of 1.2 percent. Research from Stratably and the Digital Shelf Institute also shows that brands reinvest, on average, 7.2 percent of their digital sales into retail media spend.

However, 67 percent of brand leaders say that content quality on product pages is a critical component of their return on ad spend (ROAS). Retailers increasingly understand that their suppliers are the best source of complete, accurate, compliant data, and want to enable the efficiency and simplicity of that collaboration.

2. Rising Compliance Standards

Regulatory bodies worldwide are raising the bar on the information retailers must provide for consumers to be able to make safe, informed choices about the products they buy. The financial and reputational repercussions of noncompliance can be high. As a result, retailers are including strict quality checks for their suppliers’ product data as part of the content submission processes through these connections.

3. AI-Propelled Quality Checks

Retailers and content service providers are increasingly using AI to scale automated content quality checks on supplier data in a way that simply wasn’t possible before, in some cases reducing validation times from three business days to five minutes.

Brand Leaders: Take Advantage of the OmniSpec Opportunity

The automation and simplification of direct connections and, ideally, OmniAPIs, speeds time to market — in some cases, what used to take months can now take weeks, what used to take days can now take minutes.

• Make sure your product content teams are switching to the new OmniAPIs as soon as they're available. The best content service providers are development partners with the retailers building these new connectors, and therefore are able to deploy them to customers as quickly as possible.
• Unite the teams and processes across the product lifecycle for maximum efficiency. In many organizations, the teams that own the logistical data are not well integrated with the teams that own the product page data. Raphael Gutierrez, director of global PXM and product strategy at Valtech, recommends that all product stakeholders develop a detailed product lifecycle map.
• Add your voice to the direct connection revolution. The trend of these direct connections coming to life are a direct result of brand executives using their combined market power, category by category, retailer by retailer, to encourage prioritized investment in building these connections. Retailers are energized by these conversations as they see the expected ROI, however, the IT and human resource investment required to bring these connections to life has to be prioritized over other initiatives. Your voice matters.

The future of Adaptive Retail described by Walmart will require a ton of innovation, automation and data across the entire shopper journey. The foundational fuel of all those experiences will be complete, accurate, continually optimized product data, which can only be delivered through automated, streamlined collaboration between retailers and their suppliers. Make sure that you and your organization are preparing for this future so that you can take maximum advantage of the growth opportunities that arise from it.

Josh Silverman is senior vice president of retail and distribution at Salsify, a provider of product information management and related technology applications.