Suppliers – An Untapped Resource?

In a week of headlines like “Tesco posts worst results in its history” and “Morrisons to cut 720 head office jobs”, I cannot help but wonder whether own label suppliers remain an untapped resource, presenting a real opportunity for renewed innovation and growth.

There is plenty in the news about how retailers mistreat suppliers - partly because much of the press loves some ‘retailer bashing’; it plays well to their audience.  But I want to focus on the huge potential of working more closely with suppliers, of building good Supplier Engagement. At S4RB, we know from our own retail clients that engaging better with suppliers can result in cost reductions, innovations and mutual benefits for both supplier and retailer. This is especially true around Private Brands and own label retail products.

Some months ago, I wrote a blog post about Sam Walton and his views on supplier relationships.

Sam said: “Communicate everything you possibly can to your partners.  The more they know, the more they’ll understand. The more they understand, the more they’ll care. Information is power, and the gain you get from empowering your associates more than offsets the risk”.

Often, suppliers find themselves running up against an almost impenetrable wall when trying to solicit information from their retail customers. This is one of the reasons Supplier Self Help is a fundamental building block in all of the solutions offered by S4RB – making information available to suppliers 24/7 so that they can be more efficient, meaning that a retailer typically saves in excess of £100,000 a year due to reduced queries and the reduction in resource to service these queries.

This is by no means the end of the story. Supplier Engagement goes much further than Supplier Self-Help. It is about engaging and empowering suppliers as part of a Private Brand team.

A good example of where engaged suppliers can make a huge difference is customer feedback, and how retailers ‘Listen’ to customers.  A retail Contact Centre gathers huge volumes of data about product performance and consumer feedback, but inevitably only has the resource to focus on the more serious issues.

However, sharing this information with suppliers (for example, using software such as supplierENGAGE™ and UBX baseHUB™) allows them to analyse individual product performance. Retailers can effectively ‘crowd source’ quality and product management in order to understand consumer feedback, and product performance monitoring to drive improvements and a great customer experience.

At a time when retailers are having to review internal costs and operations, Supplier Engagement offers the opportunities for both cost reduction and operational efficiency. By enlisting the help of suppliers, retailers increase the overall size of their effective Private Brand team, and ultimately improve own label performance.

Tags: Supplier engagement

James Butcher

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