Intelligent merchandising – the key to successful supplier collaboration in 2023
By Edward Betts, European General Manager, Retail Express
The deepening cost-of-living crisis with soaring inflation rates and energy bills, and as a result, a more cautious customer, has put significant pressure on the retail industry. Retailers are now having to work harder and think smarter to create stand-out promotions through closer collaboration with suppliers. This relationship is a fundamental part of day-to-day operations, yet it’s interesting to note that many trade promotions established between retailer and supplier aren’t profitable.
A key issue is that the majority of retail functions are still dominated by outdated and siloed methods of working, making it extremely difficult to maintain accurate records and renders the collection of vendor funds more difficult. Retail Express’ latest whitepaper 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.
The Digital Transformation of Supplier Collaboration – Whitepaper download [Link]
Improving processes, predictability and profits
A new approach involving more collaborative planning capabilities and better coordination will place the retailer and supplier relationship in a much stronger position to face the challenges of a highly competitive marketplace head-on. Digital transformation is ushering in a new dawn of algorithmic retailing as a means to optimise promotional planning and strengthen supplier collaboration.
Algorithmic retailing, Gartner’s term for the use of artificial intelligence (AI) in retail to drive automation and deliver real-time insights, is needed particularly where current internal practices have become a direct hindrance to growth and market responsiveness. Intelligent merchandising software facilitates decision-making in real-time, often with levels of automation, as well as better planning and forecasting based on real data insights. And now freed from administrative burden, staff can focus on tasks that deliver improvement and innovation.
For example, by using AI to analyse current and historic data with the trading and merchandising conditions that underpinned those sales, retail businesses can create stand-out promotions based on accurate predictions about how pricing and promotional plans will impact future revenue and profits. Previously this intelligence could only be gained from implementing a plan and waiting to see its effect. The ability to gain such knowledge in advance is truly game-changing.
Better supplier collaboration and promotional ROI
The shift from paper to a digital solution facilitates real-time supplier proposals and deals. Analysis of data in real-time helps the retailer and supplier react to shifting sales patterns, gain insight into promotions planning and understand the supply chain dynamics involved. In addition, the sharing of evidence-based forecasts, joint business plans with funding transparency, digital contracts with full audit trails for compliance, and a dedicated supplier portal mean that trading partners can work together to tighten agreements and ensure sales growth with full visibility of promotional ROI.
By effectively offering one version of the truth siloed approaches and conflicting practices are replaced with a singular and transparent plan that everyone can get behind, shared by all stakeholders to become the definitive, unified method of operating. Utilising real-time operationally collaborative merchandising allows two-way communication, two-party authorship of promotions and consent, and joined-up business planning.
Taking advantage of AI-powered intelligent merchandising in 2023 will serve to strengthen retailer and supplier relationships at a time when unlocking value, maximising promotional ROI and gaining a significant advantage over competitors has never been more important.
Download our latest free whitepaper to learn more: The Digital Transformation of Supplier Collaboration [Link]