Written by Stephanie Chan, June 16, 2020
Did you know that successful retailer and supplier collaboration can directly influence 1/5 of the total revenue? Coresight, a company that delivers data-driven retail technology insights, set out to understand what it takes to improve collaboration between retailers and their suppliers, as well as, the benefits that come along with that collaboration. Here are some of the key survey findings and their perspective on how they reflect now, under the current Covid-19 situation.
Collaboration Challenges Highlights
In the survey respondents were asked to identify key factors that contribute to difficulties between retailers and suppliers when looking to collaborate. For retailers, the ranking starts with lack of trust and communication, lack of product availability to meet shoppers’ demand, to limited data transparency. For suppliers, the order was surprisingly reversed.
Insights:
- Trust and communication are a big hurdle that retailers and suppliers confront amid Covid-19. With many offices closed temporarily and people going on mandatory vacation, it became impossible to get in contact with for urgent issues. Some suppliers might even go under without prior notifications, making them impossible to reach for retailers. Ineffective communications lead to impaired trust, thus making collaborations more difficult once things start to get back to normal.
- Lack of product availability goes hand-in-hand with limited data transparency during the pandemic. For example, the spike in demand for sanitation supplies and other essentials. Without knowing the status of products in the retail supply chain, it was difficult for retailers to predict and plan for.
Advantages of Strong Collaboration
What happens when retailers and suppliers collaborate well together? The survey highlighted that one of the biggest advantages for strong collaboration is the ability to meet shopper’s needs, which in turn improves customer satisfaction. The other top two were higher efficiency in operations and lower costs in the supply chain.
Insight:
- While all three advantages are crucial to the success of retailers and suppliers, meeting shopper’s demand is the single most important factor that retailers focus on in the pandemic. Being able to deliver to customers in need will increase trust and reliability for retailers post Covid-19.
Key Criteria for Successful Collaboration
What do retailers consider to successful collaboration? The responses from retailers and suppliers shows that two sides have different expectations when it comes to collaboration. Understanding the discrepancy may help the industry reach mutual ground and improve relationships between retailers and suppliers.
On the retailer’s sides, they want suppliers to deliver what they promise, have a vision for the future, and have appropriate resources. On the flip side, suppliers look for retailers with appropriate resources, the ability to quickly respond to trends, share feedback, and to be able to identify actionable insights.
Insight:
The criteria that retailers and suppliers look for in their partners are very much the same, whether that be in normal times or a pandemic. Retailers need what they asked for from a quality and quantity perspective and of course, that the selected supplier partner will be in business long-term.
Suppliers need their partners to be resourceful and equipped with knowledge and insights in industry trends and be able to help them understand what they need to produce at maximum efficiency.
Summary
Although we always talk about ways to have stronger collaboration between retailers and suppliers, we can see from the Coresight survey that each side has a different attitude and expectation towards being “successful”.
It’s important to establish mutual understanding between both parties and work toward a common goal. Good collaboration not only improves business operations, it also leads to increased revenue and reduced risk in the supply chain.
To find out how to get started with improving vendor management, contact CBX who excels in providing solutions to help facilitate the relationships between retailers and their suppliers for over 25 years. For more information, contact us here.
Written by Stephanie Chan, June 16, 2020