Retail has changed dramatically in the last decade. Retail is the same as it always was. Both are true, and eSourcing has responded.
Scanmarket is honored to have many global and regional retailers among its customers. These companies are leaders in using eSourcing to make supply chains better able to control costs, manage risk, and find new sources of supply. We contacted some of them recently to ask about trends in retail procurement, especially eSourcing. What we heard is summarized below.
Retail has changed dramatically.
In the last decade, retail supply chains have had to respond especially to increased needs for speed and agility. As more and more retail has moved toward eCommerce, retailers have had to modify how they manage their solicitation process to make sure they are providing their internal customers with the best sources of supply to fit their needs.
A large North American cosmetics retailer is now running its online bids in a more flexible fashion than previously. Where they would once publish a set of requirements and wait for vendors to respond, they are now working more upfront with bidders to jointly define specs and soliciting more “proposals” and fewer “quotes”. While this increases the amount of prep work for bids, it results in better outcomes for the business.
Additionally, retail procurement departments are being asked to run many more solicitations than in the past.
According to the eSourcing leader at a large European clothing retailer, "Tenders are faster, smaller and more targeted than ever before".
Her internal customers need specific responses to specific needs and can’t wait for larger, aggregated bids even if that means passing up some potential leveraged savings opportunities.
On top of process changes, there are wholesale shifts in strategy being managed through the eSourcing platform. A Scandinavian food retailer is engaging more direct sources and supplier consortia in their RFPs in addition to the more typical distributors and wholesalers. This provides for innovative solutions to business problems even if it may complicate the award decisions for specific bids.
Retail is the same as it always was.
Cost pressures and the need to drive savings are just as intense in retail as they’ve always been. This fact is one of the reasons we’ve seen, if anything, an increase in usage of eAuctions by Scanmarket’s retail customers. eAuctions have been actively used by more companies across more categories than ever before.
According to the procurement manager at a Nordic retailer, "Savings from eAuctions have actually ticked up in recent years especially in indirect categories".
We continue to see significant bidding activity in private label, commodity indirect, and simple services. Scanmarket regularly publishes statistics on eAuction trends and dynamics.
For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at www.scanmarket.com or contact your Scanmarket Account manager.
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