03 Feb Why Supplier Engagement is important for private brands
We work with retailers and suppliers across a broad range of projects which cover quality, compliance, product development, sustainability, diversity and more. Some of these projects involve national brand suppliers, some include suppliers of goods not for resale. But predominantly our work is with retail private brand teams and their suppliers. The common theme for these retailers is they all have a need to collaborate with suppliers to complete tasks and collect information whatever the specific initiative. To do this often requires a degree of educating the supplier.
I often get asked: “Why do you focus on private brands specifically?” and “Why is Supplier Engagement and working as One Team so important for retail private brands?”
In this blog I will answer these questions.
Why do we predominantly work with retail private brands?
The main reason is the scale and challenges unique to private brands. Most national brands operate in specific verticals or categories, for example Diageo in beverage and Pork Farms in chilled convenience. A typical national brand will have tens or hundreds of products across only a handful of categories.
Contrast this with a retailer who will typically have many thousands of products; in some cases tens of thousands of products, covering multiple food and non-food grocery categories, and potentially also household or apparel.
Therefore, when there is a need to collect information, such as volumes of chemicals in products affected by REACH legislation, the question is not put to merely a few tens of suppliers (which a brand owner may be able to do with phone calls and a few spreadsheets) but is across hundreds (or thousands) of suppliers – making Outlook and Excel an untenable solution to get the job done.
This is where Supplier Engagement can add real value through efficient communication, supplier self-help and ultimately, rapid, accurate data collection. This saves the retailer time and money and ensures they get accurate information, when they need it.
Retailers need less support with their national brand portfolio
For the retailers that we work with, national brands don’t come with the same level of risk. If a national brand product isn’t compliant with legislation, it’s the brand owner who will come under fire, not the retailer. And as described above, it’s a much simpler task for a national brand to collect information from and communicate with their suppliers due to the smaller scale of their operations in terms of moving parts within the supply base.
There’s less need for a national brand to employ the ‘One Team’ way of working that we champion. Whereas for a retailer, it’s a different scale and level of risk. If there is a non-compliant product it is not only their brand over the door but also on the product. This needs to be managed at scale, and crucially, at pace. As well as compliance, the retail private brand team also has a lot to manage with product development, product quality, product consistency and any brand initiatives.
So, why is Supplier Engagement so important for private brands?
Not only is it the scale and breadth of products that’s difficult to work with, it’s also the challenges around product provenance and transparency that are significant for the retailer when it’s their brand – it is their name on the pack, and their credibility on the line. It comes down to protecting their brand value. So when there is need to collect information, it is most essential for private brands that this information is correct.
Good Supplier Engagement is just as important for the private brand suppliers as it is to the retailer because their own success is tied to the success of the retailer’s private brand products. This is why Supplier Engagement works – it’s a virtuous circle. Supplier Engagement is not about ‘getting more out of suppliers’ but about private brand teams and private brand suppliers working to achieve more together; as One Team.
Private brands are also central to the battle to win customers
Customers engage with private brand products which drive footfall and provide the differentiation between retailers. To capitalise on this and develop competitive private brands, retailers need to collaborate with their suppliers and work together as ‘One Team’ on quality, consistency and innovation which ensures customer satisfaction and sales. The suppliers are the manufacturing experts and need to work with retailers to develop the next generation of products. It is the suppliers who maintain quality and consistency. Successful private brands is a team performance.
To read more about why private brand retailers working as One Team with suppliers is so important, read my blog: What do we mean by ‘One Team’ for private brands and their suppliers?