Customers, compliance and clicks: How procurement is reinventing retail success.
The retail industry operates in a high-visibility, consumer-focused environment. That brings with it a host of opportunities, but also exposes it to the vagaries and shifting whims of target audiences, which are increasingly demanding as well as sliced into ever smaller, more specific demographics. In order for retailers to be successful in a heavily competitive marketplace, they must adopt advanced procurement strategies and technologies that go far beyond the traditional focus on cost savings efforts alone .
These innovative approaches create, in essence, a combination of tools and processes that empower retail organizations with greater visibility, control and insights over the entire procure-to-pay continuum. In addition to the traditional challenges in the retail industry — high staff turnover, price pressures, on and off-line competition — that continue to be factors, technology in the hands of customers has become the newest, and probably the most daunting, challenge. While “the customer is always right” has always been a mantra in retail, technology has exacerbated this power shift even more.
For retail procurement organizations, advanced technology tools help to teams operate in this new reality with the ability to reduce risk from the supply base by integrating data, spend, contract management and supplier management, thereby establishing a much broader situational awareness and process efficiency. Retailers who are actively leveraging technology as a critical component also achieve a much greater level of spend and contract compliance, as well as a more transparent regulatory monitoring capability across all associated activities. As a result of these improved processes, tools, and collaborative approaches, stakeholders will have better alignment with procurement’s goals and accomplishments tied to wider corporate strategies.
Ultimately, this enables retail procurement to streamline operations to better focus on the pressures from customers and competition.
Forecast for global retail sales growth – 2008 to 2018
Source: Economist Intelligence Unit / PwC
Retail teams using advanced procurement approaches are able to:
- Reduce the amount of time it takes to manage the end-to-end procure-to-pay process
- Centralize efforts for strategic areas that eliminate maverick spend habits, and increase buying power with common suppliers across the organization
- Improve sourcing visibility, enabling procurement to provide the opportunity to allocate and reallocate awards not only on price, but on other elements of working with a supplier (delivery time and quality)
- Offer a smoother multichannel shopping journey delivered seamlessly across bricks and clicks
- Enlist supplier collaboration in the process resulting in innovation and service improvements
Retail is a constantly shifting playing field, making it both a challenge and opportunity for procurement organizations who can best leverage technology. If you’d like to get a bigger picture of the current retail procurement environment, download our new whitepaper, The State of Procurement in Retail. You’ll learn what the issues are facing the industry, along with additional ways to use cloud-based solutions to solve for them.