Dynamics of the Retailer-Supplier Relationship

Abstract

In both retail and consumer-product-goods sectors, the gap between winners and losers widens every day. What is it about the winners that makes them more and more successful, extending their lead everyquarter? What are the dynamics driving this “battlefront” between retailersand their suppliers in the struggle for projects, profits, customers and market share? What can trading partners do to win a stronger power position in the supply chain? To answer these questions, ChainLink Research surveyed more than 130 leading retailers and manufacturers. Our unique approach explores the perspective from both sides of the trading-partner link to uncover differences in perception and reveal the myths and the realities.

Report

This report requires a Premium Subscription (available at no cost).
To download this report, please log in or register.


The research found that the processes, policies, performance, and enablers used by retailers widen the gap between winners and losers. Top-performing suppliers with high volumes and strong brands are rewarded with more shelf space and increased visibility, which further strengthens their brand and volumes. Marginal performers are “starved” out of the system. Winning retailers use logistics technologies (e.g. Track and Trace, ITL, RFID) and inbound compliance requirements such as labeling, packaging, documentation, loading sequences, delivery windows, and floor-ready merchandise to streamline their inbound operations. Suppliers that fail to comply with these requirements are levied fines, while compliant suppliers’ products flow swiftly through the system onto shelves.

This study confirms one of ChainLink Research’s key tenets: Winners and losers are determined by how well each player manages the links with trading partners (see Figure 1). Disconnects in processes, perceptions, and dialogues between trading partners are a major cause of problems and competitive disadvantages. For example, promotions are an important but contentious part of the retailer-supplier relationship. Properly done promotions can generate excitement and drive traffic, but poorly executed promotions are expensive, ineffective and result in excesses or shortages and unhappy customers.


This report requires a Premium Subscription (available at no cost).
To download this report, please log in or register.

Scroll to Top