How EDI supports the Retail Industry
Modernizing retail supply chains with Electronic Data Interchange
The retail industry has been a pioneer in EDI adoption for over three decades, replacing many manual, paper-based processes with electronic document exchange. While significant progress has been made, there is still untapped potential for EDI to deliver even greater value across today’s increasingly complex and globalized retail ecosystems in the form of retail data exchange.
The evolution and impact of EDI in retail
Early retail EDI implementations, driven by companies like Walmart and Procter & Gamble, introduced innovations such as Vendor Managed Inventory (VMI)—a model that allows suppliers to manage replenishment for retailers. VMI streamlines the flow of products and reduces waste, particularly in high-turnover or perishable goods categories. By shifting restocking from monthly to weekly or daily cycles, VMI enhances responsiveness to promotions and customer demand.
Today, EDI continues to play a crucial role in:
- Automating orders, invoices, and dispatch notices
- Improving direct store delivery (DSD) processes
- Enabling Global Data Synchronization (GDS)
For example, using advance ship notices (ASNs) can reduce receiving times by up to 60%, helping large retailers save thousands of hours annually. These benefits are magnified when ASNs are combined with synchronized product data across the supply chain.
Retail information supply chain challenges
Retail supply chains are fast-paced, demand-driven, and sensitive to errors. Unlike other industries, delays or inaccuracies in orders directly affect customer service. Increasing SKU counts and frequent deliveries only add to the complexity.
Retail supply chain EDI addresses these issues by:
- Accelerating transaction speed
- Reducing errors and discrepancies
- Providing real-time visibility into inventory and shipments
However, to fully capitalize on these benefits of EDI logistics providers, and financial institutions. By leveraging EDI data exchange and real-time data sharing, businesses can build connected workflows, maintain consistent and aligned data, and ensure faster, more accurate decisions across the entire supply chain.
EDI document standards in retail
Several EDI standards are used across the retail industry:
- Tradacoms: One of the earliest standards, still widely used despite being succeeded by EDIFACT EANCOM.
- VICS (Voluntary Inter-industry Commerce Solutions): Now part of GS1 US, VICS helped develop the “quick response” (QR) standard and CPFR (Collaborative Planning, Forecasting, and Replenishment).
- eCOM: A suite of EDI-based and emerging XML standards suited to retail supply chains.
Industry organizations shaping retail EDI
Key associations supporting EDI adoption in retail include:
- GS1: Oversees barcodes, RFID, and EDI message standards.
- GDSN (Global Data Synchronization Network): Enables secure, synchronized product and location data exchange via GS1-certified data pools.
- GSMP (Global Standards Management Process): Maintains EDI and data sync standards through retailer and supplier collaboration.
- GCI (Global Commerce Initiative): Defines globally standardized models like the Global Product Classification (GPC) system.
- ARTS (Association for Retail Technology Standards): Focuses on A2A (application-to-application, or internal system-to-system) standards such as UnifiedPOS and IXRetail.
The future of EDI in retail
As omnichannel retailing, personalization, and global trade increase complexity, EDI remains central to enabling agile, connected supply chains. By modernizing legacy systems and enabling a flexible, scalable supply chain infrastructure that accommodates varying partner EDI requirements and evolving business needs, retailers can adapt more quickly. Ongoing collaboration across interconnected networks helps reduce costs, improve service levels, and maintain competitiveness.
In parallel, many retailers are integrating modern technologies like APIs to support more dynamic, real-time data exchange with partners. AI-driven tools are also being used to enhance demand forecasting, detect anomalies, and optimize inventory strategies. These innovations complement EDI by expanding automation capabilities and making supply chain operations more intelligent and responsive.