BrainTrust Query: How can suppliers choose “Big Winner” retail partners?
Many consumer packaged goods manufacturers use jargon such as “Winning with Winning Customers” to describe how they decide which key accounts deserve the greatest alignment of resources in “win-win” collaborations.
For the past 20 years, most of these collaborations have focused on linking information technology and logistics to remove excess costs from the supply chain. For the supermarket channel, the results have been mixed. Yes, costs are reduced, but the byproduct of improved efficiency has been increasing shopper irrelevance. Shopping trips, market share, and sales volume have drifted to alternative formats. Consequently, supermarkets are becoming a less profitable class of trade for suppliers.
Perhaps as a consequence, retailers are putting a higher priority on driving differentiation and sales growth rather than emphasizing more cost cutting, as seen in research studies sponsored by GMA, IBM Business Consulting, and GMDC.
So, in allocating their limited resources to situations where they can derive the best ROI, suppliers need to be choosy in collaborating with retailers, i.e. sticking with the “Big Winners” — which begs the question, “Who will be the big retail winners in the future?”
Discussion Question: As a retailing handicapper, what should suppliers give weight to in predicting winning supermarkets in the next five to 10 years?
While it’s tempting to set a supermarket’s size and sales volume as the primary criteria for selecting winners, these measures don’t predict future success.
The weakened condition of Albertsons, Winn-Dixie, and Ahold prove that point.
What predictors of success would be on your list? Uniqueness of strategy; pricing model (Hi-Low, EDLP/EDLC); market share position in major regions; data