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Suppliers must take a partner-led approach

A recent Retail Week report has cited strong supplier relationships as a key attribute to the success of the UK’s fastest growing retailers. Supplier service levels directly impact retailers’ ability to meet customer needs, so working with vendors that have the foresight to ensure their service remains consistent and uninterrupted is essential.

It is important to understand what factors contribute to establishing suppliers as long-term business assets. For many retailers, the most important determinants of a prosperous relationship are often agreed upon at the contract negotiation stage. Thorough research and continuous monitoring must be a priority for suppliers looking to cement their place as strategic business partners.

Solid proof of capability: a good starting point

Where possible, implementing a trial period to access the capabilities of a supplier before signing up is a good idea. This could work by creating a theoretical scenario where a vendor cannot source from their usual supplier and has to quickly demonstrate how they would circumnavigate the issue to ensure delivery times are not affected. Only those that anticipate this issue by having secondary supplier agreements in place should be considered. Naturally, this is a key requirement for vendors supplying products for sale in-store. However, retailers increasingly require highly technical supplier support in relation to technological infrastructure like e-commerce platforms and click-and-collect services. It is equally important that supplier response times in this area are up to scratch too.

Understanding the needs of a buyer

In addition to demonstrating the agility of their service, suppliers should be able to draw on previous experience in the retail sector. Without appreciating the fast moving nature and unpredictability of the industry, vendors are unlikely to be able to incorporate the level of flexibility buyers in the sector typically demand. For example, when a retailer decides to have a sale at short-notice, customised labels and POS materials need to be delivered within a fast turnaround time. Suppliers that understand the urgency of this and can match it with accurate and timely delivery are the best suited to servicing retailers.

Valuable industry knowledge of trends and behaviour in the sector also allows supplier teams to offer the above the line consultation buyers increasingly demand and benefit from. Ensuring there is an open forum for providing this added value means that vendors should be maintaining regular levels of contact with their customers. In this way, strong lines of communication are maintained and issues – should they arise – can be addressed in a quick and efficient manner. This also helps facilitate an understanding of the stock replenishment rates a particular retailer requires, meaning suppliers can automate deliveries at exactly the time when they’re needed.

Cast the net as wide as possible

Retail buyers are increasingly seeking to reduce their supplier pool by using vendors that offer a larger and more varied portfolio of products and services. This is of benefit from both a cost and service-level perspective. Where possible, vendors should look to increase the volume and type of product lines they have on offer in order to demonstrate added-value in a highly competitive space. For buyers, consolidating the number of orders and subsequent deliveries made to them reduces costs as well as the impact on the environment.

Complacency is not an option

Complacency is no longer an option for retail focused suppliers as the competition to service the sector has never been fiercer. The ability to use prior experience in the retail sector to anticipate the future, as well as current needs of buyers, has fast become a key USP for vendors. Suppliers now need to match this foresight with a more responsive service to keep ahead of the competition.

Nigel Crunden, business specialist at Office Depot

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