Better supplier collaboration using AI will hold the key to retail success in 2023
31st October 2022 | 3 min read
A new whitepaper from Retail Express examines the role of real-time operationally collaborative merchandising to streamline operations, strengthen supplier relationships and boost profits.
Retail Express, a leading UK-based provider of intelligent merchandising solutions and services for retail, has launched a new whitepaper to help retailers operate smarter as they plan for 2023. As recent economic events force the merchandising team to seek new ways to improve performance and margins -while merchandising practices continue to grow in complexity – the paper reasons that greater investment is urgently needed in the technology platforms that underpin supplier negotiation and ultimately improve trade funds, reduce collection costs and drive better promotional ROI.
With a heavy reliance on legacy infrastructure, manual processes and siloed approaches, many retailers are finding, unsurprisingly, that the trade promotions established with suppliers are often unprofitable. As these relationships play such a fundamental part in day-to-day operations, a new approach to retail merchandising is desperately needed that will place the retailer and supplier relationship in a much stronger position to face the challenges of a highly competitive marketplace head-on.
The whitepaper explains how the drive towards digital transformation is ushering in a new dawn of algorithmic retailing – the use of AI to drive automation and deliver real-time insights that will free up staff time to focus on tasks that deliver improvement and innovation. This is particularly appropriate in a situation where internal practices have become a direct hindrance to growth and market responsiveness. Artificial intelligence (AI), capable of driving intelligent merchandising tools, can serve to vastly improve retailer and supplier collaboration while unlocking competitive advantage.
Edward Betts, European General Manager, Retail Express, explains: “Most retailers only have time to focus on the day-to-day tasks that allow them to keep their business operational. They simply do not have the time to fully unlock the knowledge and creativity in their workforce that would strengthen the strategic thinking needed to pursue continuous improvement. Algorithmic retail, powered by AI, enables much of the pressure on staff and management to be alleviated, while providing them with the tools to continuously improve the organisation’s capacity for strategic agility. In 2023 we will see retailers who embrace AI-powered algorithmic retail principles winning as they deliver sustainable growth in a volatile market.”
The use of a digital solution facilitates real-time supplier proposals and deals, allowing retailers and suppliers to collaborate consistently and transparently using the analysis of data in real-time to react to shifting sales patterns. This enables greater insight into promotions planning and a better understanding of the related supply chain dynamics. It also helps to ensure the better use of trade funds and improves the chances of retail businesses being more highly valued by their supplier partners.
In addition, the automatic creation of digital contracts with full audit trails reflecting step-by-step negotiations with supplier partners can save valuable time and confirm agreements. Deals can be evaluated in real-time for compliance, with pro forma invoices and supplier trade-fund reports generated at the click of a button. Crucially, being able to evidence to suppliers that the business is capable of consistently providing the best ROI for their time and money will ultimately result in a dramatic increase in in-store traffic, sales and profits.
Barry Grange, Chief Executive Officer, Retail Express, adds: “Digital transformation is driving a 15% to 20% productivity improvement in the area of Supplier Collaboration, Deal Management and Promotion Management allowing retailers to strengthen supplier relationships, improve both the amount and profitable use of traded funds leading to improved financial performance. Investing now in improvements to crucial communication and coordination between retailers and suppliers will strengthen this most important of relationships at a time when unlocking value, maximising ROI and gaining a significant advantage over competitors has never been more important.”
Retail Express’ whitepaper provides key takeaways to help today’s retail businesses navigate their own pathways to success.