Your private brands are more relevant than ever - as consumers look for more solutions, instead of individual products or brands. Based on numerous reports and research, the evidence shows that retailers with distinctive, differentiated private brands will survive and thrive.
However, this opportunity presents new challenges for your brands as you develop and market to meet changing consumer needs. The relationship between you and private 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.
The path to success lies in strategic collaboration with your suppliers.
Strategic collaboration requires a different mind-set between you and your supply partners as well as the process and capabilities to allow them to work more closely with you to identify and react to consumer demand. It’s all about jointly focusing on innovation.
Strategic sourcing is about turning strategic plans into actions. Putting your strategies in to motion –finding the right suppliers for the right products, at the right standard for your private brands.
In a competitive market where margins are shrinking and suppliers have a breadth of retailers available to them, finding and partnering with the right suppliers as well as developing them has never been more important. Yes, it’s actually important for you as the retail brand owner to develop your suppliers!
What traits make a ‘good’ supplier?
- Gets products onto shelves quickly
- Understands what it means to be a private brand supplier with you
- Fully buys into your goals, objectives, and actions
- Is committed to developing the right relationship with you
- Is loyal to you
- Completes requests accurately and on time
How can retailers that manage private brands attract and retain good suppliers? Not all of the ideal traits listed above are the kind which naturally come to suppliers. That’s why it’s very important for you to invest in identifying, qualifying, training and building engagement with your supply base.
Supplier development is crucial
Investing in supplier development is essential for true collaboration between retailer and supplier. It’s this sense of collaboration that allows a private brand supplier to fully buy-in to a retailer and become committed to developing that relationship.
At S4RB, we have seen first-hand how the sourcing and supplier development tools we provide can make a huge difference to the relationship between a supplier and retailer and can encourage meaningful collaboration.
Supplier development - tips for smooth supplier on-boarding
Because retailers are so time-pressured, we know that suppliers need to undertake the on-boarding process themselves, ideally through an online portal. This shouldn’t be rolled out with the attitude that suppliers are left to it to struggle along through the process.
The on-boarding process should help suppliers of all sizes to quickly, accurately and efficiently complete self-assessments on the road to becoming a supplier.
An online portal should allow a supplier to register, complete a self-assessment, provide product and company data and communicate directly to a member of the purchasing and procurement team, therefore easing the transition for a supplier to become a partner. This in turn commits them to the retailer’s cause and creates a sense of loyalty to the retail brand.
Brand loyalty applies to suppliers too
When the term loyalty is used in the retail environment, the obvious application is customer loyalty to a brand. However, loyalty is just as relevant in referring to how a private brand supplier engages with a retailer.
Private brand retailers will do well to be mindful of this and invest appropriately in supplier development to encourage and retain supplier loyalty. If you need more convincing, take a look at this article: The value of improved supplier relationships.