01

What’s a toll road?

TLDR: Charging brands a toll to simply send product content to a retailer hinders digital shelf growth.

When companies have exclusive content onboarding relationships with retailers, they charge brands a per SKU fee to create, enhance, and send product information to a specific digital endpoint. In some cases, a brand may pay a third-party vendor $100,000 or more to simply deliver digital product information to appears on a single retailer’s website.

Ultimately, toll roads hinder your investment to create the most impactful shopper experiences on the digital shelf. Brands are forced to pay for the exact same services: generating images and basic content, and sending that content to retailers.

Not all retailer fees are toll roads 

Fees from retailers that directly help with improving sales of more products by driving visibility, demand, value, and increasing customer loyalty, including promotion trade spend, new packaging and retailer analytics.

Data pools like GDSN operate differently than toll roads. GDSN provides a standard set of baseline product data across an entire product category. Retailers or channel partners pull the data from the GDSN-validated data pool into their own product information management solution to enrich for specific endpoints. While it costs brands a license fee to use the data pools, they are not restricted on which suppliers to work with.

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GDSN is not a toll road
Working capital actually works
02

Why are toll roads used?

TLDR: Toll roads saved brands from having to develop their own planograms and get to market faster.

In traditional brick-and-mortar retail, brands allocate trade spend - often the second largest item on their P&L - to offer temporary price reductions, rebate programs, and other promotions as well as gain preferential shelf display locations (slotting) and circulars.

After dramatic retailer consolidation (Kroger/Meyer and Albertsons/ American Stores mergers) and the fragmentation of mass media audience, suppliers were tasked with growing sales for an entire category, not just their brand. Circulars were a reliable place for retailers to get the attention of shoppers in a specific location.

To put a product in a circular, a retailer needed, minimally, an image of the product, the product title, the price, and other basic information.

Similarly, to put a product into a shelf planning system, a retailer needed all of that plus the full set of GS1-compliant planogram images.

The trouble with the approach taken by Grocery and Mass retailers is that each retailer picked a different third party, the result being that each FMCG manufacturer was ultimately forced to work with all of them - that is, paying for the same service over and over and over. Toll roads saved FMCG brands from having to develop their own, in-house planograms, allowing them to get to market faster.

Today toll roads cost brands needlessly

So in the year 2010 if you were, say, Kellogg, you’d have to pay for the same service for the same SKU multiple times: ItemMaster to produce planograms for Peapod, Gladson to produce planograms for Albertsons, Kwikee to produce planograms for Walmart, Brandbank to produce planograms for Tesco, and so forth.

In the years since Gladson, Kwikee, ItemMaster, Brandbank and others arose to plug the “planograms-and-basic-content-for-circulars” problem, a number of other technologies and capabilities that allow brands to exchange information with retailers have arisen. More modern approaches also take digital shelf merchandising into account, for which traditional planograms are not particularly effective.

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03

What do toll roads cost?

TLDR: Toll road costs vary based on which third-party vendor owns the retailer relationship.

Unlike trade marketing and promotional spending, toll road investments do not spur sales growth. Instead, these tolls merely feed an outdated industry model built for grocery circulars.

toll road costs

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Many brands spend upwards of $100K to simply send product content to a single retailer.
04

Let's stop toll roads

TLDR: If brands have content, it should cost $0 to send it to retailers.

In a world designed to maximize the efficiency of optimizing the digital shelf and targeting trade spend at revenue-generating activities, these costs would be vastly reduced or go away entirely.

 

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05

How to move past toll roads

TLDR: Open content onboarding doesn’t require complex retailer technology.

Leading digital shelf retailers like Walmart and Instacart have moved away from a toll road model, allowing each supplier to work with its technology provider of choice. This open-ecosystem approach lets brands free up trade dollars to drive more product discovery and sales.

Retailers can get started without requiring burdensome technology builds. The first goal should be to enable a supplier to send the product content needed for initial item setups and item updates directly without having to go through any third party.

Leading brands including Coca Cola, Hyland’s, McCormick, and Mondelez collectively advocate for an open ecosystem and direct connection to the retailers they sell on through the Open Experience Alliance

 

 

 

 

 

 

 

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