Supplier Collaboration: The Cure
What doesn’t kill you makes you stronger, or so the saying goes. Retailers and suppliers alike share the common objective of remaining at the forefront of competition by putting the shopper at the heart of each initiative and yet, the question still stands; Why have we yet to fully grasp the true potential of improved supplier collaboration?
For many the very idea of supplier compliance can bring about a spike in blood pressure but the truth of the matter could in fact be the opposite and be extremely beneficial for both retailer and supplier; bringing with it efficiencies from supply chain to shelf, resulting in successful merchandising plan execution.
Improving supplier compliance needn’t be such a painstakingly complicated task. It’s time to face the facts; it is now simpler than ever to drive out inefficiencies and boost customer satisfaction by collaborating with suppliers.
Supplier compliance programs are all about setting standards and resolving problems when the mark is missed. Many of the worlds’ retailers are today making significant progress toward improving their supplier compliance programs, putting solutions and processes in place that enable collaboration rather than disagreements over expectations. This methodology is still in the early adoption stages as often tactical measures are left behind in favor of a more strategic approach. Thanks to increased focus on efficiency and, specifically, advancements in technology, it is now possible to share insights and intelligence across the board and offer a single version of the truth in order to quickly identify and drive out error. This approach enables retailers and suppliers to work together to detect and avoid compliance issues before they become reality.
“As part of the continuous evolution of retail, we’re seeing a marked change in the way retailers and suppliers collaborate with one another. The tenor of compliance seems to be changing as parties fully grasp the mutual benefits available.” Comments Steve Boon, VP of Sales at Galleria. “Right now retailers are focused on operational efficiency gains that can increase sales momentum & offer real return on investment; performance based applications sit at the heart of this, whether the approach is strategic or operational.”
As retailers continue to look for areas of opportunity to reduce waste and become more efficient, the question must be asked; are un-necessary costs being passed to the shopper? The best way to cut costs is to collaborate, streamline and standardize on internal procedure and share responsibility.
“One size fits all” is the popular belief but as modern retailing has proven it is not the case, shoppers needs are changing all the time; with a growing preference for local, compact and easy to shop stores driving the diversification of many existing estates today.
The more we know about the shoppers, the more we can shape the shopping experience to meet and exceed their expectations; enter the global evolution of retail, a challenge better tackled together. Now is the time to grab collaboration with both hands and use it as an opportunity to push innovation from insights through to execution.
Drawing upon shopper insight as an example; it is possible that retailers can optimize both assortment and space through collaborative consumer behavior analysis that benefits all; supplier, retailer and shopper alike.
Collaborative cluster definition is a strong starting point; bringing retailers and suppliers closer together to get a more granular understanding of the shopper. This type of collaborative exercise can help retailers to identify transient sales from passing trade as against those neighborhood stores where the residential trade makes up the larger majority of their regular customer base. Behavioral clustering can also give retailers an insight into those destination stores which are of a massive importance to them, attracting non-residential customers from farther afield. Supplier collaboration can also prove specifically beneficial when working to review locations and competition; whether looking at sales value per mission, location type or competitor sales value.
“One size fits all” is the popular belief but as modern retailing has proven it is not the case
Working together it is also possible to gain awareness in some areas such as ethnicity & affluence groups within your store offering; covering everything from family type, income and life-stage information which can all prove valuable when considering developments to your portfolio, whether for store layout, assortment offering or promotion positioning’s.
Working in partnership with suppliers, retailers could better identify the variance in category performance by cluster and as a result enable range assortment and space allocation to be optimized; having an effect on the relevant flow, brands on show, pricing and promotion activities in store.
Whilst previously thought of as a complicated and un-necessary evil, it’s about time that the true value of supplier collaboration was known. In an ever increasingly competitive market, gaining a better understanding of the shopper through improved collaboration is more important than ever. From insights to execution, the collaborative model holds the key to complete customer centricity and ultimately to satisfied shoppers.