Working globally affords me the opportunity to see different Retailers and Manufacturers in the ongoing search for the holy grail of great products that excite consumers at so many different levels. Whether it be the over 40% of consumers supposedly only making their buying decisions based on what is “on offer” in the weekly catalogue/flyer/email/digital coupon/app delivered by whatever smart methods utilized. Or whether it is the “millennial/gen whatever/new gen/foodie” etc. etc. the list is long that further segments us every day in every way. Or whether it is the home master chef seeking the latest innovations.
Big data slices and dices us in a thousand ways, tracking our every move and thought. Soon it will be peeking into our dreams as well. Heaven forbid the thought!
So what about the hunt for the right products at the right time and at the right price? And how do Retailers find the right Suppliers and how do they strike a long lasting relationship that works for both. Tinder is easy. Swipe right. Swipe left. Not so easy when seeking a relationship with a future in creating a supply chain of the most appropriate products for the consumer. Retailers generally don’t want quick dates. They seek a longer term sustainable partnership. They seek collaboration. A recent survey amongst Manufacturers in one market where I work showed that the top 5 Retailers were ranked from 7%-50% “Difficult or Not Easy” to deal with by their Suppliers.
That demonstrates the uneasy relationship that exists across the world.
For today, let’s talk about establishing a timeline from first date to engagement to a long term stable relationship. What elements drive success and a much better ranking than 50% difficult or not easy?
Retailers have differing ways of developing products. I see three basic models. “Do it yourself” where a Retailer builds a staff resource of product development, food technology, taste, quality assurance, supply chain and project management that mimics any major brand’s infrastructure. These Retailers are nearly always first to market. Organic, Wellness. Decadence. Fair Trade. Gluten Free. No artificial flavors and colors. Low GI. Reduced Salt. No hormones. Free from. Reduced fat. More cream. Artisanal. Locally sourced. Lots of fresh in meat, bakery and produce all bearing the same Retailer brand names. This is for sure, the best way to do it. But it costs! And the idea of sourcing the requisite people to manage these functions in house is daunting to many Retailers, especially those that are Shopkeepers first, and would likely admit that Product and Brand Builder is way down the line of core competence if even present on the radar!
The second model is the “Food Warrior” model that has a team of foodies and product passionados that roam the TV screens, the blogs, the magazines and the specialty shows and markets around the globe where great innovation and unique products are to be found. Retailers following this model are few and far between but those that are good are really good at it. Consumers see their stores as places to hunt for treasure. Their stores are not one stop shops, but they are there to offer real “destination products” that make it worth the drive, or getting off the bus, or pressing that app that no one knows about….until you tell them! They carry many of the products listed above in the “do it yourself category”. But they do not pay for the extensive staff resources need to do the complete job. They spend a lot of time and energy seeking out special Suppliers that they can work with and that will give them a degree of exclusivity and at the same time, provide the product development, quality assurance and supply chain development skills needed to keep introducing new and innovative products that will be a real delight for their customers.
The third model is “let them come to you” which is the most often seen. These companies tend to value the category management and data approach and rely on extensive analysis of what the major product leaders are and then see where they can best be imitated. This is where the “fast follower” Retailers really thrive, as they command significant respect in the market place through their opportunity to sell large volumes. This third model can also be difficult to deal with. Being larger, they can be cumbersome and weighed down by bureaucracy and a silo mentality where every department has its own systems and sub systems to manage their individual areas, making the overall experience cumbersome and unwieldy.
Product development is not easy and generally not very well managed. Some Retailers are excellent at analysis and pinpointing the right products to get to. Some are excellent at development and their systems are slow and confusing. Some Retailers are great at finding the opportunity but slow to find a match to the right Manufacturer.
But here’s where the dating and engagement analogy comes to bear. It’s the same with hiring staff. You cannot train for attitude. Similarly, you cannot train for good taste. Swipe right or swipe left. Make a choice depending on algorithms or make a choice based on character traits?
It is relatively easy to draw up a supply contract that locks in price, quantities, timeline and raw materials. That’s the marriage part. It’s the engagement where we so often see failure.
Whatever the business model adopted by the Retailer, whether they be demanding or collaborative is relevant but not necessarily productive. In every case, speedy and accurate communication is crucial. And the large enterprise-wide computer systems cannot deliver the evolutionary requirements of the buying and selling process. Which leads to the spreadsheet virus because the buying teams cannot wait for IT to deliver. Hence the need for a simpler, nimble and flexible approach to Supplier and Retailer engagement. We should seek out services that offer a much more collaborative approach between Buyer and Seller. Between Consumer and Seller. Teamwork can answer most problems. And finding a way to develop more of a “Team” approach to getting to the solution quickly and efficiently is clearly the better way. Engaged people work better. They are more motivated to deliver. They have a first time right approach and will go the extra mile every time.
Once we have successful engagement, then the marriage will work and last. So let’s all think about how we can work well together rather than against each other. How we can provide solutions to each partner. And then we won’t have Suppliers rating their customers as “difficult or not easy” to interact with. Where and how does your organization rate? Maybe your next “top to top” could open a more honest dialogue for the betterment of both parties.
Next time we’ll talk engaging with Consumers. Till then, please think about getting engaged as a vitally important first step.