Pitfalls of the buyer-seller relationship: 7 considerations and a call to action
In an effort to better understand the workflow dynamics between buyers and sellers and the common pitfalls and opportunities inherent to the buying process, ECRM recently conducted an online study of more than 5,000 retailers and vendors, over a two-week period.
While it was encouraging to find that, in general, there is good alignment between retailers and suppliers, the findings suggest that plenty of room still exists for the relationship to improve.
What follows are the top seven takeaways from the research.
1. Suppliers do not have enough information about retailer goals, objective and strategy.
According to supplier respondents, their companies spend a lot of time in meetings with senior management. However, nearly 80% said they did not think they had enough information about retailers’ goals and objectives.
In addition, 60% of retail buyers said senior management did not provide enough information on strategic growth objectives. Greater visibility into the retailers’ story beyond annual reports could help educate an eager supplier community on how to better align category growth objectives.
2. Buyers are too focused on delivering category performance goals.
While both groups felt that they each understood the performance metrics desired by each side, category goal alignment appears to be more of a mixed bag, with 60% of retailers saying there was agreement, and only 40% of suppliers feeling that goal alignment was in sync. Such metrics as shopper conversion, store traffic, market basket growth and margin improvement all are common data points that need to be better defined and more clearly set for today’s buyer-seller relationship.
3. Day-to-day workload stifles innovation.
This theme received the most agreement between both parties, with some 60% of retailers and 85% of suppliers saying they either did not have enough resources to drive innovation or that excessive workloads were hindering innovation.
Common obstacles limiting innovation include excessive paperwork facilitation between parties, data overload and analysis. Many suppliers also say retailers spend too much time with their joint-business planning partners and not enough time embracing challenger brands that drive category incrementality and growth.
4. Buyer rotation creates a lack of continuity.
Desk changes, buyer rotation, headcount reductions and more all help eliminate category history, erode buyer-seller relationships and impact the flow of category development initiatives and goals. An easily accessible repository of information could offer a solution to having to continually start over from scratch every time there is a change of responsibilities on the retailer side, and help enable entrenched supplier-partners to maintain the credit they deserve. This was the No. 1 “write-in” concern among supplier respondents.
5. Buyers are in a constant state of line review.
Both suppliers (75%) and retailers (80%) agreed that the category planning process is a useful practice in the buyer-seller relationship.
However, suppliers felt that retailers are in a constant state of line review without having the ability to consider new supplier and category growth opportunities. Suppliers felt that retailers need more time to talk to suppliers, and that retailers spend too much time meeting with senior leadership versus the supplier community.
6. Buyers spend disproportionate time on supplier paperwork and follow-up.
Both parties felt that paperwork, administrative tasks and vendor compliance were workflow items that took a lot of time away from the process of putting meaningful products on the shelf and obtaining higher growth goals. One major concern among suppliers was that a lack of standardization across administrative functions sucked up resources and time that could have been spent helping to drive productive outcomes.
Retailers said that paperwork and supplier follow-up were the two most time-consuming tasks they dealt with, with more than 75% of retailers listing it as their No. 1 or No. 2 concern.
7. Buyers spend too much time analyzing data.
“Way too much data; not enough time to analyze,” one respondent said.
The important takeaway is that it’s not so much about the data deluge — it’s about knowing when to shift assets to capitalize on the trends and insights obtained from the data.
For today’s retailer, there are ongoing concerns around the need to win shopping trips, drive market basket growth, achieve sales growth and improve margins. To gain the shoppers’ attention, win at digital transformation and gain more “share of heart,” these common buyer-seller pitfalls add to the complexity and cost of doing business and create inefficiencies.
As retailers are doing more with less, ECRM Retail Services is well-positioned to help your teams become more productive, and to help improve retailer-supplier interactions, support your mission to achieve category growth goals, increase productivity and find better assortments to win new shoppers and grow market baskets.
Wayne Bennett is SVP retail at ECRM. To learn more about ECRM Retail Services, contact [email protected].
While it was encouraging to find that, in general, there is good alignment between retailers and suppliers, the findings suggest that plenty of room still exists for the relationship to improve.
What follows are the top seven takeaways from the research.
1. Suppliers do not have enough information about retailer goals, objective and strategy.
According to supplier respondents, their companies spend a lot of time in meetings with senior management. However, nearly 80% said they did not think they had enough information about retailers’ goals and objectives.
In addition, 60% of retail buyers said senior management did not provide enough information on strategic growth objectives. Greater visibility into the retailers’ story beyond annual reports could help educate an eager supplier community on how to better align category growth objectives.
2. Buyers are too focused on delivering category performance goals.
While both groups felt that they each understood the performance metrics desired by each side, category goal alignment appears to be more of a mixed bag, with 60% of retailers saying there was agreement, and only 40% of suppliers feeling that goal alignment was in sync. Such metrics as shopper conversion, store traffic, market basket growth and margin improvement all are common data points that need to be better defined and more clearly set for today’s buyer-seller relationship.
3. Day-to-day workload stifles innovation.
This theme received the most agreement between both parties, with some 60% of retailers and 85% of suppliers saying they either did not have enough resources to drive innovation or that excessive workloads were hindering innovation.
Common obstacles limiting innovation include excessive paperwork facilitation between parties, data overload and analysis. Many suppliers also say retailers spend too much time with their joint-business planning partners and not enough time embracing challenger brands that drive category incrementality and growth.
4. Buyer rotation creates a lack of continuity.
Desk changes, buyer rotation, headcount reductions and more all help eliminate category history, erode buyer-seller relationships and impact the flow of category development initiatives and goals. An easily accessible repository of information could offer a solution to having to continually start over from scratch every time there is a change of responsibilities on the retailer side, and help enable entrenched supplier-partners to maintain the credit they deserve. This was the No. 1 “write-in” concern among supplier respondents.
5. Buyers are in a constant state of line review.
Both suppliers (75%) and retailers (80%) agreed that the category planning process is a useful practice in the buyer-seller relationship.
However, suppliers felt that retailers are in a constant state of line review without having the ability to consider new supplier and category growth opportunities. Suppliers felt that retailers need more time to talk to suppliers, and that retailers spend too much time meeting with senior leadership versus the supplier community.
6. Buyers spend disproportionate time on supplier paperwork and follow-up.
Both parties felt that paperwork, administrative tasks and vendor compliance were workflow items that took a lot of time away from the process of putting meaningful products on the shelf and obtaining higher growth goals. One major concern among suppliers was that a lack of standardization across administrative functions sucked up resources and time that could have been spent helping to drive productive outcomes.
Retailers said that paperwork and supplier follow-up were the two most time-consuming tasks they dealt with, with more than 75% of retailers listing it as their No. 1 or No. 2 concern.
7. Buyers spend too much time analyzing data.
“Way too much data; not enough time to analyze,” one respondent said.
The important takeaway is that it’s not so much about the data deluge — it’s about knowing when to shift assets to capitalize on the trends and insights obtained from the data.
For today’s retailer, there are ongoing concerns around the need to win shopping trips, drive market basket growth, achieve sales growth and improve margins. To gain the shoppers’ attention, win at digital transformation and gain more “share of heart,” these common buyer-seller pitfalls add to the complexity and cost of doing business and create inefficiencies.
As retailers are doing more with less, ECRM Retail Services is well-positioned to help your teams become more productive, and to help improve retailer-supplier interactions, support your mission to achieve category growth goals, increase productivity and find better assortments to win new shoppers and grow market baskets.
Wayne Bennett is SVP retail at ECRM. To learn more about ECRM Retail Services, contact [email protected].