EXCLUSIVE: Leading global research Company GFK is set to hold a crisis meeting next week with consumer electronics retailer JB Hi Fi, which has banned the research Company from obtaining confidential information from its stores. We can also reveal that another mass retailer is also considering a ban on GFK.
According to GFK sources, the meeting will take place next week in Melbourne. However, JB Hi Fi Marketing Director Scott Browning claims that the Company will not lift the ban on the research Company and that doing business with GFK is a “high risk”.
There is also speculation that one other major retailer is set to follow JB Hi Fi’s lead and ban GFK from collecting store sell-in and sell-out data.
According to Browning, “The information we have is confidential and while we do not mind sharing it with suppliers, we do not want to share it with GFK. You could say that we are moving to the dark side and that suits us because the Australian market is small and we are growing.
“Last year we grew 30 per cent and we do not want tier 2 or 3 competitors getting access to what we see as valuable information. It’s high risk dealing with GFK. We are very competitive and it is hard to justify doing business with them,” he said.
GFK Retail and Technology is a sector of the GFK Group, one of the top five market research companies worldwide. It says that it is world’s leading market researcher tracking Point-of-Sale (POS) data in technical consumer goods and entertainment media markets across retail stores like JB Hi Fi and Harvey Norman.
GFK collects point-of-sale data from the likes of JB Hi Fi in more than 80 countries, including Australia. This forms the basis of its core research. Its StarTrack reporting platform compiles this data and provides retailers, manufacturers and industry executives with comparable market reporting information at both country and international level.
A senior executive in a major competitor to JB Hi Fi said, “We have always been concerned about the level of confidential trading information that we hand over to GFK and the decision by JB Hi Fi has prompted us to consider going the same way. This is an important decision which will have to go to a board meeting before we make a final decision. We have spoken to several of our trading partners about the situation as they are watching the situation closely,” she said.
The executive said that they had not yet spoken to GFK about their concerns.
A senior Samsung marketing executive said, “We have spoken to GFK and we are concerned. They are about to have another meeting with JB Hi Fi in an effort to convince them to change their mind. The problem going forward is that JB Hi Fi represents a large share of the market and to remove them from industry data being gathered is going to affect the numbers.”
Officially GFK did not return calls to ChannelNews on the issue; however, a senior executive of the research company who spoke to ChannelNews on the proviso of not being identified said that the European research company was concerned. “We believe that we can use computer modelling to estimate the sell through data based on previous StarTrack data that we hold on JB Hi Fi.”
The Samsung executive said, “Using past data and computer modelling is not as good as the raw data. Going forward we will not know whether JB Hi Fi is up or down in a category. We will know what our sales with JB Hi Fi but we will not be able to track competitive sales data.”
A senior executive of a major Japanese company said, “This will affect the credibility of the GFK data as JB Hi Fi is a key part of this industry. To not have access to competitive data from such a big player raises serious questions about the overall integrity of what GFK is selling. GFK’s fees for its data are not cheap and it will be interesting to see how they handle the situation.”
In the past, GFK Australia has tried to ban ChannelNews from exposing competitive information on consumer electronic sales. The company has also written to subscribers to its service threatening to terminate their access to information if they leak information to ChannelNews.
“The GFK Retail and Technology group have a serious issue on their hands and if one more major retailers denies them access to retail data, the industry as a whole will struggle, as they basically have a monopoly on retail sell-in and sell-out data. As a result, GFK knows how to charge for it,” said a subscriber to the service who primarily sells through Harvey Norman and JB Hi Fi.