Own brands are more relevant than ever as consumers look for more solutions, instead of individual products or brands. Evidence shows that retailers with distinctive, differentiated own brands will survive and thrive.
However, this opportunity presents new challenges for own brands in developing and marketing to meet changing consumer needs. The relationship between the retailer and own brand suppliers today is about much more than just acquisition of products to be sold. In short, a good retailer-supplier relationship is about strategic collaboration around sourcing and on-going supplier development.
Becoming the retail customer of choice
Woolworths has been savvy to recognize that working with winning suppliers is a prerequisite for creating winning products. Put simply, Woolworths needed to become the “Customer of Choice” for suppliers to win in the competitive Australian grocery market.
To do this, Woolworths decided to transform supplier relationships and understood that listening to and measuring the voice of the supplier is key to achieving this.
Before starting the process of researching and selecting a software provider to build a system specifically to engage with own brand suppliers, Woolworths reached out to own brand industry mogul of more than 30 years, Tom Stephens, for advice.
Creating a practical playbook for Woolworths
Tom recommended meeting with the Supplier Engagement experts at Solutions for Retail Brands (S4RB). A key factor in deciding to work with S4RB was its uniqueness in own brand domain expertise and the fact that its solutions work alongside existing systems such as Oracle and Bamboo Rose.
S4RB flew out from their UK head office to Woolworths HQ in Sydney to carry out some working sessions with the own brand team. An important element of the trip was for S4RB to meet with suppliers, ranging from the large, strategic manufacturers through to the smaller operations. Whilst suppliers spoke very highly of their peer-to-peer relationships with Woolworths Buyers and Quality specialists, they highlighted opportunities for more information and greater consistency at a higher level.
This trip resulted in the Woolworths senior leadership team engaging S4RB to perform a top-to-bottom review of how to scale supplier engagement and management best practices.
The output of S4RB’s review was to create a practical playbook for Woolworths – enabling them to turn to the right item to meet their challenge. Elements of this playbook included practical systems recommendations but significantly, also operational recommendations to address the areas that will result in statistical wins for Woolworths while addressing what suppliers had reported as being important to them.
Systemising the playbook
There are many processes involved in a major private brand operation. A significant piece of the retailer-supplier relationship consistency and scalability puzzle was a new system to engage with and develop suppliers.
The playbook consciously addressed several key questions: How would a new supplier-facing portal sit within the rest of its systems landscape – some of which is all supplier, some of which is solely own brand?
"S4RB is practical, understands how own brands work and has an open approach. Woolworths has seen encouraging improvements in feedback from own brand suppliers. We believe much of this is attributable to a collaborative approach to supplier relationships that seeks benefits to both Woolworths and suppliers. S4RB and its platform played an important part in achieving this." - Ward Duvall, Strategy and Business Development Executive at Woolworths
Raising the bar on supplier engagement
Woolworths carries out a regular supplier survey to ask how it is doing as a retail partner. Since working with S4RB, Woolworths has seen a positive impact on supplier relationships and a resulting increase in positive contribution from suppliers to the success of Woolworths own brand.
The launch of Woolworths’ supplier capabilities survey earlier this year was one of the recent steps taken in this journey which started three years ago when Woolworths took a top down view of what it really needed to do to drive positive supplier engagement.
Woolworths is truly at the forefront of own brand growth and the result of its considered planning to view suppliers as valued partners and respond to their concerns and feedback has put it firmly on the path to success in Australia’s competitive own brand market.