In today’s constantly changing business environment, suppliers around the world face the challenge of building sustainable partnerships with retailers. To fuel mutual growth and navigate uncertainties, suppliers must address key opportunities that arise from their retailer partners. Identifying and acting on these key opportunities demonstrates that suppliers listen to their retailer partners and are vested in strengthening the relationship.
Identifying supplier opportunities based on retailer priorities
Through feedback collected from 526 retailer organizations and 4,524 supplier organizations in 38 markets via Advantage Report Voice of the Customer and Voice of the Supplier, we’ve identified the most significant global opportunities for growth as a supplier when managing retailer relationships. The data was acquired between February 2022 and January 2023.
This data details how retailers value competencies in their business partners, signalling to suppliers which areas are most valuable to focus on as opportunities for strategic alignment and mutual growth. This article analyzes the opportunities that suppliers have, according to retailers, and recommends how to build their relationships while accounting for emerging trends.
1. Ease of Doing Business
Among the highest priorities for retailers, ease of doing business, plays a pivotal role in supplier-retailer partnerships. When suppliers are perceived as easy to work with, their retail partners enjoy working with them. Being easy to collaborate, communicate, and strategize with naturally tends to strengthen advocacy and identify opportunities for success.
To improve this competency, suppliers can be proactive and responsive with their retail partners. This demonstrates commitment and willingness to collaborate, promoting engagement. Business partners don’t want to struggle to communicate with their partners, nor do they want to compete for their attention amongst competitors. Prioritize communication and responsiveness and initiate joint planning sessions to demonstrate your willingness to collaborate and your proactive ability.
2. Supporting Retail Strategies and Goals
One of the most important goals of a retailer is to differentiate its positioning and strengthen consumer engagement in an increasingly fierce and competitive multi-channel environment. Their supplier partners can help them achieve this by strategizing and aligning with them to deliver solutions that capture their target market specifically.
Retailers, like suppliers, are also being nudged by evolving environmental, societal, and consumer needs to implement sustainability goals. Suppliers can work with retailers through a sustainability engagement program to simultaneously develop and implement sustainable initiatives while nurturing their relationships.
Retailers have unique needs. Suppliers must engage with them to understand these needs and work together to achieve their goals. However, suppliers must ensure they can deliver on their commitments during strategizing sessions without jeopardizing other aspects of their operations, as overcommitting, or acting without understanding end-to-end impact can quickly backfire. For this reason, cross-functional engagement in support of unique commitments and deliverables is sensible.
3. Collaborative Planning and Execution
Collaboration with retail partners often involves a joint planning process where the suppliers facilitate data sharing and alignment on each other’s business targets for mutual success. Through this process, suppliers can determine with their partners how they can support them with their goals and strategies, especially differentiating retailers from their competition.
This collaboration is also particularly effective and helpful during times of crisis, like the COVID-19 pandemic, supply challenges, talent management and surging inflationary pressures, as it helps minimize damage while simultaneously building trust and strengthening the partnership.
Though collaboration is critical, suppliers must maintain focus on the basic execution of fundamentals, such as on time and in full (OTIF). While OTIF will remain a continuous challenge for suppliers worldwide, those prioritizing OTIF alongside other operational and strategic responsibilities will continue to nurture their relationship.
4. Cross-Functional Alignment
Cross-functional alignment in supplier organizations benefits both the supplier and the retailer. As suppliers recognize the importance of engaging their broader organization, embedding retailer collaboration throughout the planning process becomes crucial to building the knowledge to support them for mutual success.
Suppliers can optimize their operations by fostering cross-functional alignment, enhancing customer engagement, and quickly addressing problems. This supports informed cohesion throughout the business and enables the supplier to better provide the retailer with accurate, responsive and valuable support.
5. Maintaining agility in response to changing needs
Agility in suppliers is critical to responding to their dynamic business environment and evolving retailer needs. Like most retailer priorities on this list, it is beneficial to suppliers, too. However, retailers are directly impacted by their suppliers’ agility in response to needs, rapidly evolving marketplace changes and consumer expectations.
Suppliers must respond quickly to change and be flexible and dynamic to maintain agility. They can build these qualities through their organization by implementing employee empowerment, decentralized decision-making, embracement of technology, cross-functional themes, agile methodologies and processes and a culture of continuous improvement and innovation.
Emerging hot topics — ESG and digital leadership — don’t appear to be top priorities
Interestingly, ESG and digital leadership, two trends often discussed in the FMCG industry, do not actually make it to the top of the priority list regarding what they need first and foremost from supplier engagement. However, this does not reflect these topics’ importance or critical role in our future. Our engagement experts hypothesize that these topics are ‘next level’, complex, and where best-in-class standards are not yet fully understood.
From the data referenced, suppliers and retailers view collaborating on the fundamental ways of working as necessary, ensuring the foundation is in place before tackling more multi-layered issues. As you can see, it’s easy for ESG and digital leadership to naturally interweave into the foundations of working, compounding the necessity to refine these priorities to avoid tactical missteps.
Advantage Group’s Voice of the Customer program is pivotal in shaping successful partnerships between suppliers and retailers in the rapidly evolving retail landscape. This program identifies areas of opportunity to strengthen relationships and help people and organizations work better together. Get in touch with an Engagement Advisor to learn more.