If there is one reason as to why retail companies can have a healthy bottom line, it is because of their ‘like-for-like’ (LFL) growth. But sustaining growth in the LFL stores is a challenge faced across geographies and retailers. When a retailer or brand opens a new store, it creates excitement in the locality & encourages curiosity in shoppers to visit. Hence we see a big surge in walk-in traffic into the store & even if conversion rates aren’t very high, the store manages to generate a boost in revenues. But as the store ages, competition catches up, and there are new entrants into the marketplace. Shoppers get pampered with too many choices & shift their loyalties to retailers who offer special services & perks. This results in higher retailer spending for marketing & operations expenses, in order to improve the shopping experience. With top-line erosion due to competition & increase in spend to retain shopper loyalty, retailers end up in loss or decreased top and bottom lines. There are multiple ways to overcome this challenge & remain profitable. One of them is driving healthy competition among your suppliers by providing relevant insights about category share, product attribute trends etc. A category in retail can have multiple product lines and in each product line is served by multiple suppliers. There are suppliers who are category leaders across product lines & on the other side, there are suppliers whose presence is minuscule. Every supplier aspires to be a category leader or grab as much market/store share as they can. Retailers need to leverage this competition among suppliers to expand their reach & fill the gap in their assortment. They need to provide suppliers the opportunity to scale in existing product lines by giving access to category insights & collaborating with them to launch new products in complementary or supplementary product lines. For the retailer, these initiatives will result in better products on shelves, better-targeted promotions and lead to increased shopper engagement and loyalty. At the end suppliers will be happy to see spikes in their category share, shoppers will be happy to get new & relevant choices & ultimately as a retailer you will increase your share of the overall market pie. A few questions that retailers need to find answers to & share with suppliers to help them grow their business:          

• Attribute analysis (like flavor, color, pack size, cuisine, gluten free etc) :       
  • Which are your top selling products, & which the product attributes make items fly off the shelves?
  • What’s the right packaging size for your retail format? For e.g- smaller pack sizes sell more in convenience stores than hypermarkets.
  • Which attributes of your products directly impact customer purchasing decisions in various categories?
  • Is there a marked difference in product attribute preferences across geographies & demographic profiles?
  • Does the channel of sale determine the attributes of potential top selling products? For e.g. products where touch & feel does not play an important decision making factor sell more on e-Commerce channels.
• Price band analysis (>$5, $5-$10, $10>$15 etc) :       
  • Are your shoppers price-sensitive?
  • Do they behave uniformly while purchasing across categories?
  • Do you have gaps at different price band levels?
• Seasonal trends (Halloween, party supplies, decorations etc)       
  • Do you have seasonal spikes in sales of specific categories?
  • Do you forecast for these seasonal items & collaborate with suppliers to get these on time in full?
  • Do you stock up in the store before the sale season?
• EDLP(Everyday Low Pricing) product analysis (list of products & volume share)       
  • Do you have product offerings in the ELDP category?
  • Do you forecast volume of these products & share insights with your suppliers?
  • Do you optimize prices for ELDP products?
• Product affinity analysis (which products are bought together)       
  • Do you share insights on shopper basket with your suppliers?
  • Do you encourage bundling & cross selling across suppliers?
• Shoppers’ unfulfilled needs (New product opportunity)       
  • Do you have a system to identify unfulfilled needs of shoppers in your stores?
  • How fast can you collaborate with suppliers & bring these new products onto the shop floor?

These actionable category insights will equip suppliers to cater to the unfulfilled need of your shoppers. New product launches to fill price gaps etc will recruit new customers in the category. Bundling & cross-promotion of products will increase shopper basket sizes. Last but not least, these insights will also help suppliers to channel their marketing budget into targeted campaigns which will give them better ROI. Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.        

Most retailers still lag behind when it comes to utilizing data for transforming the analytical ability and drawing conclusive insights. More than collecting available and obscure data, it’s the acumen of putting it to effective use which is costing retailers dearly. Surprisingly, most retailers are still treading slowly as the process of supplier collaboration is often slow, time-consuming, complex, and delivers slow results. And only those retailers with a keen eye to improving profit margins really put data to work. The two primary aspects here are collecting possible data and putting it to use.

Data collaboration

Do not just rely on point of sale data; rather look for details from all possible sources in and around the store to garner information that can truly help. Inventory movement trends, stock replenishment cycles, demand spikes, shopping trends, fast and slow-moving products, product visibility impact, store-help induced sales, gauging impact of promotions, collecting shopper feedback, trend analysis, shopper demographics, periodic sale comparison, order-to-delivery time lag, ordering cycles and return to vendors are some key areas from where valuable data and insights can be extracted. Processes and technologies should be utilized for collecting, storing, and easily retrieving data when needed.

Analytics and action

The retailer has to take the lead in designing seamless workflows and utilizing technologies for integrating and analyzing data. This will offer ready-to-use and valuable insights that can drive the benefit extraction wheel with supplier and manufacturer coordination. Let’s now look at the fundamental aspect of putting the collected data to full use:

Willingness to share and benefit

A 2014 study on ‘Shared Data’ conducted by CGT and RIS states that 43% of retailers do not share any data with their suppliers. Retailers should step up and look seriously into this and assess the reasons for the lag, which may include an unwillingness to share data, unawareness about added benefits, lack of properly collected data, difficulty in establishing proper data sharing channels, and use of needed technology. It’s time retailers fast track on this to not only increase profit margins but also to heighten shopper experience.

Establishing coordination

Mutual understanding, transparency, and awareness of the benefits can lead to improved retailer-supplier collaboration. This has to have impetus from both the stakeholders as coordination should be established ideologically, methodologically, and pragmatically. The right technology, coordinated processes, and co-strategic efforts can make the process highly tangible.

The ‘what’ and the ‘how’ of sharing

Though ‘what’ and ‘how’ to share evolves from the premise of mutually agreed on terms and processes; it’s the retailer who anchors most of the effort. Retailers should document the quality of data and information exchanged which induced better, palpable action and results. The same stands true for the ‘how’ aspect of sharing data. Utilizing cloud-based systems, centralized data repositories and pre-packaged insights can make the process of data sharing easy. When suppliers and retailers can get the relevant information they need without spending too much time, then the mutual decision-making process will become faster and profitable. Technology obviously binds coordination, but compatibility of technology among the coordinating members is really important. Though the nature and size of the members define the technology they use, there has to be a common technological platform where compliance is maintained.

Appending your benefit list

More than listing the common benefits of putting data to ideal use through proper collection and sharing, it’s the shift in the way you perceive the benefits of supplier collaboration that counts. The below chart from the 2014 ‘Shared Data Study’ conducted by CGT and RIS shows the top 10 benefits of data sharing: The above chart clearly shows how priorities can change and this is where sustainable growth comes in. So start looking for useful data, engage the right processes and technology, and start sharing it right away to create a mutual growth story. Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.  

 As per a Harvard Business Review report, if shoppers fail to find a product that they are looking for, 7% to 25% of them will not replace it with a substitute and around 21% to 43% of them will go to another store to buy the item. Now this clearly negates the section of retailers who believe that shoppers will pick an alternate product from the same category if they fail to find the intended product. And due to intense competition, retailers also must ensure proper product spread and relevant inventory to prevent empty aisles.

There are three primary aspects to this which need to be addressed by all competitive retailers:

1. Stock movement and performance

Knowing stock movement not only ensures timely inventory but also leads to greater demand estimation which prevents out-of-stock situations. Here are some key points that need to be looked at:

Know your stocks

You have to develop a routine which ensures adequate stock at all times by establishing an effective communication channel with suppliers. You have to look at stock refill cycles, daily point of sale data, demand spikes, on-shelf replenishment practices, daily stock reporting, promotion backed sales, and so on. All these activities must be made into a regular process which can then be easily followed.

An analysis conducted by a group of institutions (Emory University, Goizueta Business School) on ‘Retail out-of-stocks’ found that 70-75% of out-of-stocks are a direct result of retail store practices (either underestimating demand or having ordering processes/cycles that are too lengthy) and shelf-restocking practices (product is at the store but not on the shelf). This clearly mandates the need to develop proper inventory management processes and store practices to avoid out-of-stock situations.

Know your sale

The process of selling involves a lot of variable factors and is also subjected to many targeted activities, all put together, you should be able to estimate the rate and nature of your sale. You have to identify how your products fare at different shelf locations, what impacts the product push at various store locations, ratio of sale difference between regular, weekend, festive and promotional periods, and so on. Once you start looking for these details you will begin to finely conclude on the nature, ratio, and rate of sale at all times. This is really crucial to always keep your aisles filled with products which your shoppers demand.

Know your products

The obvious off-shoot of knowing your sales performance is knowing how your products perform in various categories. Looking at point-of-sales data gives you an overall picture of sales and inventory status but analysing it leads to proper understanding of performance of your products. This analysis will lead to identifying aspects like most demanded and least demanded products, impact of promotions and festive occasions on most and least demanded products, identifying self-sustaining and promotion based products, and so on. Now if you start looking at these broadly you can easily conclude on product priority and stocking priority, you can also look for more suppliers to support additional demand for products based on your priority list.

2. Promotion and marketing impact

Apart from the general demand spikes backed by promotions and overall marketing campaigns, as a retailer you should assess the true impact of the promotions. For this, you must get a broader estimate of the average industry sale expectation for every promotion and compare it with the actual sale made. If possible, you can also cross verify competing store’s promotion backed data and look for differences. If there is a marked negative difference from the average expected sale then the need to look for in-store issues like out-of-stocks, poor visibility, ineffective promotions, etc., need to be looked at. And if you have exceeded expectations you have to identify aspects and processes which did it for you. These could be better supplier responsiveness, smoother supply chain, right inventory, better visibility, and so on. This approach, over a period, will give you key performance indexes to lift your sales and anticipate early stocking.

3. Collaboration with suppliers

Nothing converges without supplier collaboration. Retailers can achieve optimum product stocking, estimate promotional sales, identify overall product performance, improve refill cycles, do demand forecasting and develop smarter stocking processes if they work coherently with suppliers. Retailers have to consider suppliers as their extended arm, and vice versa, for preventing empty aisles and also preventing overstocking at all times.

As a retailer you can reduce cost of inventory with real-time inventory flow based on process and analytical collaboration with suppliers, and thus, reduce out of stock situations. By identifying the key performance indicators and constantly working on them, you can increase your sale and shopper loyalty. Retailers and suppliers can achieve clarity of supply cycles, avoid unnecessary trips and overstocking at both ends, improve distribution and prepare for trends with reliable demand forecasting.

Conclusion

Establishing coordinated processes with your supplier network can bring out the obvious advantages of optimizing inventory and preventing empty aisles. This calls for building collaborative models, enabling intelligent technology, avoiding petty haggling, and creating a win-win environment which delivers significant benefits across the supply chain.

Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.

 

 

 The existing level of retail collaboration with suppliers lacks processes for co-strategic development and a focus on enhancing shopper experience. Intelligent decision-making and support are necessary for a strong merchandising ecosystem which drives and balances the retail business. The key for a retailer is to keep every supplier stably integrated into a single system where every effort is focused on boosting retail growth and shopper loyalty. The solution lies in viewing the problems carefully and in an unbiased way. This can lead to removing frictions between retailers and suppliers like: ‘I’m the market mover’ ego, ‘I know better’ tag, blame games, big player tag, and so on. So the resolution to go for sustained growth rather than short-term gains has to start with:

Building a Decisive Platform

When you aspire to bring everyone on a mutually beneficial platform, ensure that the processes and efforts are meaningful and profitable to every participant. The approach, however, has to be a collaborative effort as suppliers’ processes, methodologies, functional aspects, analytics, inventory management, strategies, etc., have to be considered so that they stick onto the integrated platform.

Pace of Execution

What may be a real definer is the pace of planning and execution which the integrated supplier platform can bring; by removing all the paper-based, internal and naive processes which currently do the job at a slower pace. Speed does add a whole new vigour to on-shelf availability, real-time inventory, enhanced shopper experience, category filling, new product launches, faster action on shopper feedback, and faster procure-to-pay cycles.

Should Not Weigh You Down

Ensure that the elaborateness and the integration should not weigh you down. It should improve information and merchandise movement to conclude at never before achieved levels of on-shelf availability and shopper experience. So, maintaining process compatibility, resulting in intelligent and quick analysis of varying purchasing patterns, merchandising, promotions, etc., should be checked at the earliest and worked upon collectively with the suppliers. Any frictional components slowing or defeating the collaborative effort should be rectified quickly.

Ensure Quality Usage

How can you ensure that all the suppliers are using integrated processes effectively and sincerely? This might call for educational sessions for all the parties involved during the adoption phase. A need for greater cohesiveness should be exercised for at least minimal gestation periods, for the results to surface. Once the benefits resulting from effective collaboration become visible, decision-making will become more informed and less time-consuming. Reliance on business intelligence and analytics tools will grow and improve the certainty quotient of demand forecasting. The trap here may be to route back to old decision-making practices based on un-comprehensive information and intuition which might have worked in the past. This is where key decision makers across the supply chain should fully understand and experience the quality of results based on assistive decision-making.

Engage Tools and Technology

The more collaborative you become the more technology should be leveraged to garner granular and macro level benefits. This may need integrating supplier processes, engaging analytics software, maintaining cloud-based centralized databases, real-time information exchange, macro-level performance dashboards, software for predictive analytics, co-strategic marketing initiatives and most importantly, a technology that enables heightened speed of planning and execution. A recent study on data sharing between retailers and suppliers conducted by CGT and RIS found that 71% of data sharing leaders operate a web-based portal for faster and effective information exchange.

Build Common Goals

Another key benefit of collaboration is to move away from the customary setting of individual business goals. Retailers and suppliers need a broader approach of goal setting which is collective, mutually beneficial and looks at industry and the shoppers at large.

End Note

The benefits are quite visible and spring upon the fundamental premise of supplier integration and collaboration. The power of information exchange can bring all your suppliers onto an integrated network. Together, retailers and suppliers can build a high performance, intelligent and agile supplier network to ensure that measurable benefits lead to sustainable growth. Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.    

Supplier Management is the term used to describe scouting for, inspecting and engaging in business with suppliers. All online research, site visits and performance audits, negotiating contract terms, getting quotations and managing payments are in the scope of supplier management. Retailers are always looking for the most profitable ways to bring products to market. This essentially means an increased dependence on suppliers and wholesalers. A top-down view of the supplier-side business is important for the success of a retail business. Suppliers impact the buying choices of shoppers and therefore, it becomes necessary to nurture a healthy working relationship with them. Building and preserving this liaison falls into the scope of ‘Supplier Management’. Effective Supplier Management increases customer satisfaction, ensures better product quality and quality of service from the supplier, while reducing costs at the same time. Supplier Management begins with finding the right suppliers that can provision the goods or services on contract or as-need basis. Retailers must consider pricing, capacity, quality and turn around time while deciding on a supplier. It is necessary to have a clear view of the supplier’s finances, insurance policies and certifications. Post selection, supplier management is all about managing a pool of suppliers – assigning jobs, checking performance and compliance to contract terms. Commonly, retailers have multiple suppliers for a single product enabling backup suppliers to step in if the preferred one cannot deliver. As a practice, retailers need to keep a comprehensive database of supplier information including contact details, certificates, insurance paperwork, and taxpayer identification numbers. It is important to sign a non-disclosure agreement with the supplier if there is a need to access sensitive data. It is necessary to keep this information, including related documents, as current as possible. Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.    

The power of Big Data analytics is turning data into action. Both the brick and mortar and e-retailers are finding their ways and means to capture the shopper imagination. Even now the traditional US retail outlets account for almost 90% of the sales. As shoppers and their behaviour evolve retailers will need to rely heavily on data analytics to understand the nuances of how to influence or activate shopper demand. The manner in which e-retailers personalize their offering to individual shoppers is already a game changer when we compare the brick and mortar with e-retailers. But the traditional retailers have also realized this weakness and have found their way out. The success of the traditional retailers will depend on how they utilize their data analytics to understand the demographic of the shopper profile, how they partner with their suppliers and how they provide the right shopping experience at retail outlets.

Dissection of Loyalty, POS and Panel data has provided deep rooted insights into the shopper profiles that the retailer can use to drive offers and coupons. Retailers have come up with promotions where, as soon as the shopper walks-in, an app provides the offers on the most relevant items for that individual based on his previous purchases. Data analytics has made this a reality. The success of a data analytics platform will also depend on the data feeds, cleansing mechanism, algorithms, modelling technique and other aspects which need to be mapped with the real and changing envirnment. Retailers, like Walmart and Kohl’s, analyze sales, pricing, economic, demographic and weather data to tailor product selections at particular stores and determine the timing of price markdowns. In an interview in 2013 with, Karem Tomak, vice president of analytics for Macys.com, admitted that just three years ago the department store relied on Excel spreadsheets to collect and make sense of consumer data. Now the retail giant credits Big Data and analytics with a double-digit percentage increase in revenue. Shipping companies, like U.P.S., mine data on truck delivery times and traffic patterns to fine-tune routing. The usage of Big Data is not restricted to only Retail/CPG environments but it has already expanded to other business verticals.

Partnering and collaborating with suppliers is the next big element which can really make a significant impact on the retailer’s topline. Deals/Promotions, Space, Product, Supplier, Order Management can all be driven under one platform and that’s the magic of Analytics. When we combine all these functions, the next big question comes in terms of how we build the story and how do we assimilate or make insights more actionable. Proactive planning of promotions with suppliers will really make a great difference in sharing the success or failure of a plan and make it more accountable.

The third element is enhancing the shopping experience at the retail outlets. The way brick and mortar retailers can turn this into a differentiator is by transforming the shopping experience as a celebration. “Surprise the Consumer” – There could be 5 lucky random consumers who could win a $500 dollar store coupon. “Look and feel for your consumer” – if someone is really scrambling in your store purchasing last minute items for party at home or if there is an old lady finding it difficult to shop, seize the moment and provide a helping hand. You have already made a huge emotional connect driving this initiative. These are softer elements that the retail environment can provide through its in-store personnel.

There is plenty of anecdotal evidence of the payoff from data-first thinking. The best-known is still “Moneyball,” the 2003 book by Michael Lewis, chronicling how the low-budget Oakland A’s massaged data and arcane baseball statistics to spot undervalued players. Heavy data analysis had become standard not only in baseball but also in other sports like Soccer, Formula 1 etc. So this is the moment for the retailers to capture the shopper imagination.

Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.

 

A retailer’s arsenal for raising profit margins certainly includes ushering in new and improved products on shelf before they become commonly available. The tag of being the first to introduce new products based on shopper feedback is definitely a huge bonus as it not only keeps the competition a step behind, but also creates shopper loyalty and goodwill.

Though the idea seems readily acceptable, the same cannot be said about its implementation, as it needs collaboration at various levels of the supply-chain both horizontal and vertical. A report (by Arthur D. Little, 2005) indicates that companies considered as real innovators achieve around 66% of their turnover from new product launches. And in this ultra-competitive age retailers have to play the anchor in helping suppliers and manufacturers come with new products and replenish merchandise faster. Here’s how to go about it:

Collaborative effort

When intelligence and emotion is conveyed rather than pushing data and information to the suppliers and manufacturers, collaboration becomes fully engaging and fruitful. As retailers are in a unique position to listen and assess shopper behaviour and patterns, product innovation is mostly happening at the retailer’s aisles. You just need to pass these insights to the suppliers with smart collaborative processes to make it count.

Information management

An effective information management system must effectively answer these:

• Does it note and categorize customer related information and pass it back to the supply chain or does it just gather information informally and pass it on?
• Does it add intelligence and prioritize purchasing trends and noted behavioural changes?
• Does it acquire information from multiple sources and differentiate between random one-off patterns and visible altering patterns?
• Is the timeliness of information exchange kept up?

Advanced information management and business intelligence system should be put in place for enabling collaboration that works.

Effective supplier discovery and on-boarding

An active retailer can only be as active as its suppliers and manufacturers. This makes it ever more important to look for suppliers who are pro-active and who listen to their retailers. When a retailer is sure of what he wants on his aisles it’s better to have suppliers who deliver it, rather than just depend on product-push merchandising. This mandates retailers to have automated processes on their supplier network and make supplier discovery and on-boarding easy and fast.

Reducing new product launch time

With automated systems accepted by both suppliers and manufacturers, retailers can now instantly give product ideas and product tweaks. They can avoid all the regular paper-based, generalized feedback which delays the whole process. Automated processes will have a domino effect leading to quicker product launches, as retailers would be able to pass on information faster through the system. It will assist in faster uploads of product catalogues and enable easy navigation of organizational approval processes thereby quickening product launches. Easier access to product and supplier information will also help retailers easily identify the type of products that they would like to source. Even suppliers will have easy access to retail and product performance insights which can help them gear-up logistically. This will not only bring in new products but also drastically reduce the time-to-shelf, resulting in a better shopper experience.

Accurate predictive analysis

Engaging smarter automated processes, coupled with synchronized information exchange, can reduce the uncertainties in predictive analysis. This helps in more successful demand forecasting, inventory optimization, on-shelf availability, product launches, personalized offers and category management. Automated predictive analytics will also improve product on-boarding and reduce time-to-shelf, thus increasing shopping experience and showing shoppers how they are heard accurately and quickly.

Easing out manufacturer’s challenges

A major challenge for manufacturers is to align their production and distribution processes based on the expectations of their shoppers and retailers. And with growing demand for newer product launches aspects such as product category filling, phasing-in and out of products, capacity planning, logistics, negating out-of-stock situations, faster product launches, promotions, reducing time-to-shelf, etc., become extremely important for a manufacturer. This is where a retailer with strategic and automated processes can ease the challenges out with timely, accurate, and real-time information, making things simpler for them. A supplier also checks in as a key handler here and the synchronization between all these can lead to smarter stock planning, faster procure-to-pay lifecycle, faster product launches, innovative promotions and high profit margins.

Conclusion

The key aspects to be considered for new product launches are:

• Developing insights into products, categories, and shoppers
• Understanding supplier lifecycle and networks
• Evolving the process of information exchange and collaboration
• Relying on capital un-intensive products in short time
• Reducing pitfalls in new product launches and avoiding delays

The key for all these is to rely on automated, accurate, and synchronized processes through the whole supply chain with its key anchor pinned at the retailer.

Join the Retail Collaboration Network on LinkedIn, and connect with experts and users interested in Supplier Collaboration.

 

 

In the growing competitive market the success of retailers and suppliers is completely driven by the collaborative and proactive action that they take in the competitive market. Every sqft cost for the retailer should be optimized and sharing actionable information with all the stakeholders on the go is going to be the key differentiator.  The 21st century shopper has at his disposal an array of technology driven choices. The theory of making a mass product and succeeding was easier in the past. In the new norm customized product offerings and services will be the key driver for success. The primary goal for the retailers and CPG manufacturers will be to improve shopper engagement. Retailer supplier collaboration would play a key role in driving that success.

New formulation, packaging and offerings have to be driven by deep studies undertaken in the retail space and understanding the shopper at a granular level. While past product launch success always provides a great indicator for future action, retailers need to be aware of the changing landscape. The retailer is always closest to the shopper and understanding their specific requirements and real-time communication with the buyer. At a retailer level deriving the scorecard on all the key supply chain parameters (fill rate, margin, ROV, sales growth, sales/sqft) across suppliers becomes very important.

The shopper is not always looking for dollar discounts, when they are consider the retailer-supplier impact on their neighbourhood and community. Some smart engagements could be conducting health camps to detecting cardiac issues, blood donation camps, dietary plans and football/baseball games. Engagement tends to be more effective when demographic targeting is also taken into account. Healthy and sustainable offerings strike chords with shoppers when they choose a retailer/supplier. The success of private labels wasn’t a fluke happening. Retailers really understood the shopper need in terms of benefits, product features, packaging and the overall value that they sought. The retailer needs to reflect back and see if there is an opportunity to move some of the categories into e-commerce and have it shipped directly from the supplier’s warehouse. This will be a win-win situation for all the stakeholders (shopper, retailer and supplier). The shopper gets a benefit as the product is directly sourced from the supplier’s warehouse. Retailer can utilize the additional space for some of the fast moving items while the supplier also receives the payment immediately due to quicker sales cycles.

The journey from knowing and buying a product is very complex.  They are likely to first check out online reviews, poll their friends through social media, compare features among similar products, check prices, and search for coupons. With the advent of smart phones and other networked devices, this research is taking place at home, in the supermarket, in the fitting room, in the aisles, and even at the cash register. Technological advances (social media, apps, smart phone) have created an unprecedented impact on shopper behaviour. Retailers can really package their offerings at a neighbourhood store level rather than at a national or state level. Social media mining will provide lots of insights around the demographic requirement and help the retailer segment and position their products appropriately.

Customers are really glued to their smart devices. The changing social norm is also felt in the Banking and Financial institutes.  Recently some of the banking firms realized that getting the customers to visit their premises is important. To drive that they developed various customized offerings and surprises for the walk-in customer. Similarly they also engaged the relationship manager to maintain that personalized touch. The whole banking product and services were oriented to make them feel that “they care for them in all situations”.

What are some of the things that the retailer should care for to keep abreast of these changing social norms?

• Establish deep rooted connections with the neighbourhood: Understand the insurance, college and infrastructure needs of the locality and drive relevant engagements
• Involve in their social campaigns: Cancer detection Camps, Health Awareness Camps, Sport promotions
• Customize offerings based on demographic needs
• Strengthen the e-commerce platform
• Develop strong supply chains which will ensure that shopper get the right product at the right place at the right time

Today’s retailers are already struggling to stay afloat in the tough economy while meeting growing shopper demands – in such a scenario, a lack of collaboration with suppliers adds another level of challenges. With insufficient process collaboration, retailers as well as suppliers have to deal with funds/profits recovery, invoice mismatches, fund mismanagement, manual errors, delays, and a load of other non-value added activities. These activities eat away a great deal of time and resources. According to a study by The Byline Research Group, 96% of invoice processing involves keying data from paper; it takes an average of 12 days to process a single invoice; and 25% of invoices are paid late — adding additional pressure in the supply chain.

So, what can retailers and suppliers do together in order to build a seamless network and optimize the order to pay cycle? Here are some thoughts:

Centralized and integrated data

The primary requirement for collaboration is easy access to information at a central location for both retailers and suppliers. This not only provides a single version of the truth, but also offers visibility into every stage of the fulfillment and payment process. When the information is centralized, it becomes easier to forecast inventory requirements; consolidate requisitions from various outlets, geographical locations, and departments; and benefit from volume pricing, discounted rates, or competitive deals from suppliers. 

Streamlined procure-to-pay cycle

Enabling complete visibility in order to optimize the procure-to-pay cycle is the next step towards achieving a steady state of collaboration. This can happen through process automation and defining of workflows that put the right data in front of the right people so that they can take timely action. Transparency also enables easier and faster reviews and resolutions. By using a platform specially designed for linking suppliers; retailers can effectively automate payments/receivables, boost monitoring, simplify tracking, and significantly reduce the workload on business resources.

Advantages of collaboration

Effective process collaboration offers several advantages. It improves cash flow while reducing financial leakage or funds loss. It can automate and streamline the process flow and detect the discrepancies in the cycle quickly. Faster procurements and better relationships with the suppliers is just the beginning.  A significant benefit achieved by the retailers is higher quality and quantity of promotional deals. With effective collaboration retailers can track, audit, and report deals while providing the feedback loop visibility to the suppliers.

Automated invoice management

We often find that many retailers still struggle with paper-based invoices that require multiple reviews and corrections. Moreover, there is a constant need for follow-ups resulting in tremendous delays. With effective supplier collaboration a robust workflow can be created for:

• Guided invoice submission
• Real-time three-way matching
• Validation and review
• Exception handling
• Tracking and reporting

This can bring suppliers and retailers on the same page and offer several benefits like reduced errors, minimized re-processing overheads, faster processing, and better cash flow to suppliers. Due to effective management of large quantities, value of payment discounted invoices can also be increased, leading to substantial bottom-line savings.

End note

An Aberdeen report titled: B2B Collaboration: No Longer Optional, states that the leaders in B2B collaboration revealed significant gains in terms of a 50 percent reduction in time for cash-to-cash cycles and optimized service levels. Process collaboration can bring many benefits and there is no reason why retailers should not invest in it.

 

 

All businesses are constantly striving to reduce costs in order to remain competitive in the challenging economy. Due to the strong presence of varied factors like increased awareness for environmental concerns, nonstop upward movement of cost-to-serve, technology-boosted consumer empowerment, or the spread of the omnichannel way-of-life, supplier collaboration is more of an obligation than a choice. The key is to eliminate the barriers to collaboration between suppliers and retailers. Only a seamless alliance is capable of achieving organizational goals of both partners in a cohesive fashion.

A collaborative partnership can wipe off up to 5% of the end-to-end costs for suppliers as well as retailers

360° visibility into inventory: If two entities collaborate, a panoramic visibility of the combined inventory is possible. This helps in cost reduction through multiple ways: forecasting product demand and purchase plans accurately, using consolidation centers on a shared basis, tracking down duplicate stock items, eliminating wastes, fulfilling orders in high-speed mode, minimizing the probability of returns, and so on. Tying replenishment with fulfillment: When the core systems work in-sync and the manufacturers act in absolute harmony with the retailers – right and timely decisions can be taken about the production and inventory management. Effective collaboration provides much better results when there are multiple locations and channels involved. Optimized promotions: It often happens that when companies take the onus for promoting products individually; they fall short of the intended effect even as the advertising costs soar. To make promotional activities far more meaningful and appealing to shoppers, retailers and suppliers should join hands and draw up targeted campaigns.  For instance, a producer of branded meals can combine its offering with a private label edible item. Analytical efficiency: With the advancement of technologies like cloud computing and digital analytics, retailers can constantly gather a mammoth amount of data in real time. But, it costs retailers to maintain this type of high-end infrastructures. Collaboration allows retailers to sell or share data and retail insights to partners, and in the process remuneratively convert a cost center into a profit center. Analysis by the Aberdeen Group shows that in a two-year period, the occurrence of retail and consumer marketing enterprises entering into collaborative relationships with core suppliers has seen a jump of about 29%, whereas this figure for non-core suppliers is 15%. By coordinating effectively, suppliers and retailers can together save costs, and at the same time provide better services and products to their shoppers.