Situation

  • A large Nordic retailer wanted to run an eAuction on different kinds of pesto products
  • A thorough RFP showed good competition between the suppliers
  • Spend: €1.450.000 annually
  • Previously one supplier for all the pesto products
  • Reluctant to switch supplier as the existing relationship had been working fine

Solution

  • 5 suppliers were pre-qualified for the eAuction based on a thorough RFP and product testing
  • Conducted a Cherry Picking eAuction with the functionality Leading/Not leading including yellow light to motivate the suppliers to continue bidding during the event, as they will get a better perception of the closeness to the leading bid
  • The incumbent supplier was given an advantage of 2% in the eAuction to honor the good relationship and to take potential switching costs into account

Result

  • High bidding activity - 269 bids submitted - 117 from the incumbent supplier
  • The eAuction lasted 63 minutes including 24 extensions of 2 minutes
  • €417.000 (28%) saved compared to current price