How Tech-Enabled Sourcing Can Help Retailers Live Up to Today’s Customer Expectations
Many consumers are interested in shopping at businesses that share their values. How can your supply chain give you an advantage here?
What industry isn’t rapidly evolving due to competition, global uncertainty and business models that circumvent the traditional norms? Retailers especially are hit hard by the evolving business maze that requires organizations to remain nimble and invest in strengthening strategic foundations. To be successful, retail business leaders must prioritize identifying and attracting new customers while bringing unique, compelling products to market.
One way retailers can set themselves up to thrive is by utilizing a tech-enabled approach for sourcing and supplier strategy to modernize the procurement process. Why is it more important now than ever for retailers to look at their current supplier strategy through a technology lens? Especially in the areas of sustainability, cost management, business agility and scaling to meet supply and demand, implementing a digital solution for supplier strategy can create measurable impact towards boosting the health of the business.
Attracting and Retaining Customers
Value alignment is a strong driver of consumer preference. Several studies have shown that consumers are interested in shopping at businesses that share their values, especially sustainability. This trend makes it critical for retailers to be transparent and upfront about their sustainability practices so consumers perceive they are doing business with a brand that is trustworthy.
A 2019 survey led by Hotwire found that 47 percent of internet users worldwide had ditched products and services from a brand that violated their personal values. At the top of that list of values? Protecting the environment.
With retail supply chains becoming more global and complex, becoming a champion for sustainability might seem like an impossible task. With the right technology, though, retailers can more easily ensure that they maintain sourcing integrity across their direct suppliers, their supplier’s suppliers and their entire supply chain. Technology can automate mission-critical processes, empowering procurement and supply chain leaders with better visibility into their supply chain while also demonstrating their sustainability efforts to consumers.
Outsmarting the Competition
The rise of broader omnichannel retail and the ability of consumers to purchase products online and receive them nearly instantaneously has given buyers near-infinite choices for where they make purchases. The result is that retail trends are increasingly fickle, making business agility more important than ever. To remain competitive, retailers need the ability to respond quickly as market trends change, or they risk losing revenue and customers to their competitors.
How can technology help? A strategic sourcing function, combined with technology that can digitize important data in a single, easy-to-use repository, allows for greater oversight into a company’s portfolio, quicker collaboration across different lines of the business and delivers much-needed agility. This ultimately enables retailers to quickly bring new products to the market and take advantage of new revenue opportunities as they arise. This agility also has the benefit of giving them more control over their product orders and inventories to address the specific demands of consumers in real-time.
Business agility can also be a key differentiator for retailers on both offense and defense. With procurement software that brings advanced analytics and better supplier connectivity, retailers are better equipped to deal with any supplier risks that might occur. Today’s retailers know that managing their supply chain means managing more than just their own. They need a detailed view into their suppliers to ensure they can predict any potential disruptions and action accordingly.
Minimizing Lost Revenue
Retailers cannot afford to lose revenue due to outdated approaches to sourcing. Using static spreadsheets and other outdated systems can cause errors that lead to a loss of revenue, customers and market share due to operational inefficiencies. Maximizing cost-savings across all areas of the business is critical in an industry that is forced to secure purchases from consumers based on quality, pricing, availability and convenience. A retailer’s long-term success often lies in the ability to have great transparency and connectivity between its sourcing and financing teams.
A tech-enabled approach to supplier strategy offers a level of transparency and engagement that empowers retailers to be smarter in managing their suppliers and contracts. By implementing technology, companies are optimizing their businesses in new ways. This includes the ability to identify more cost-effective supplier partnerships as well as taking advantage of new tools that allow them to re-evaluate the entire supply chain on an on-going basis instead of only at specific points in time. This ultimately helps retailers secure the optimal relationships without compromising product quality and product stock.
Additionally, adopting a procurement solution that digitizes processes brings synchronization and collaboration to an organization’s supply chain. This allows retailers to take advantage of a more connected enterprise that turns previous cost inefficiencies into cost savings. With a better understanding of their overall supply and demand, retailers can work to eliminate or avoid instances of overstocks and out-of-stocks, helping them avoid revenue losses and enabling them to better address the ever-changing demands of their customers.
A tech-enabled approach to sourcing and procurement gives retailers critical visibility into their supply chain and a valuable leg up in an increasingly competitive industry landscape. By employing an easy-to-use technology platform, retailers give themselves access to more powerful insights that can positively impact business outcomes and improve the customer experience.
This technology can also help retailers bring new products to the market more quickly, better meet consumer demands and support sustainability efforts. As the retail space continues to grow, the businesses that are in the best place to be successful will be those that realize the importance of procurement and invest appropriately.
Stan Garber is president and co-founder of Scout RFP, which provides sourcing and procurement software.