Opinion: Think like a buyer

 

Think like a buyer - how to use data to build better retailer relationships

Q: What’s the best way to get your product listed / promotion agreed / range extended?

A: Establish how it helps the buyer to hit their targets. Then show them.

 

All grocery suppliers are chasing the same thing - more products, in more stores. It’s a zero-sum game. The winners understand what the buyer needs, and how they can help.

So what are a buyer’s objectives?

Many buyers will tell you that they are measured on 20 or 30 KPIs (often forgetting what the ‘K’ stands for). There are 3:

  1. Increase sales - deliver effective promotions, great NPD launches, create new markets, optimise range & distribution, manage availability and supplier service levels
  2. Minimise costs - buy for less, negotiate the best promotion deals and rebates, better terms, implement value-chain analysis, minimise waste, re-tender own label contracts, hedge currency, develop grey-market procurement. This is especially important in a competitive and deflationary pricing environment.
  3. Manage the margin mix - drive sales of own label products vs brand, ensure that own-label marketing & formulation are fit for purpose, develop tertiary and emerging brands, deliver great NPD launches, and maximise sales of higher margin sub-categories

These 3 actions should drive their one true KPI - quantum profit. (If they tell you that isn’t the main KPI, ask them to speak to their shareholders).

The buyer also has to do this within the retailer’s overall value proposition (covering price, quality, and breadth of range).

 

How can a supplier help?

  1. Speak the buyer’s language - don’t talk about your own financial year, and your own product categories. A buyer’s job is simple - to hit their own numbers by week 52 (of their retailer’s year). Make sure you know when that is (you’d be amazed how many suppliers don’t know!)
  2. Know the shopper, and look at their perspective - Jeff Bezos bangs on (successfully!) about “start with the customer and work backwards”. Be impartial, recommend what you know to be right for the category, and the customer. Don’t be afraid of recognising failure, and fixing it
  3. Make use of the data that’s available. Everyone talks about being data-led, fact-based or any other cliche that jumps on the bandwagon -  wanting to appear like Amazon and Google. Most suppliers don’t do basic analysis of the data that’s freely available from retailer web-portals
  4. Don’t hide from the facts - being data-led may mean that you have to recommend de-listing your own products on occasion, or reducing range

 

Buyers get bored with suppliers giving them anecdotes, opinions, excuses, or 2 inch thick brand presentations that are baffling, selective, and one-sided. Being data-led means being honest, and that can be liberating.

It’s also easy. Retailers make this data available - use it.

How many times have you heard people using terms like data-led, fact-based, big-data; or talking at length about the latest trends in machine-learning, AI, consumer and loyalty information - the ‘sexy’ end of data, if there is such a thing? (There isn’t). In my experience most suppliers don’t know the basic facts about their own sales and supply-chain. This is unforgivable, and retailers expect suppliers to know this stuff.

Large suppliers can have regular meetings, ‘top-to-tops’, JBPs, implants, and be ‘category captains’ (whatever that means), and that’s all great ...but when you become a trusted source of advice, it changes the dynamic of your relationship with a retailer, and your proposals will be taken seriously.

Buyers value most those suppliers who actively seek to partner with them to deliver their targets. There can be a very strong alignment of interests between buyers and suppliers, they both want to sell more, it’s not zero sum if you can help to grow the market.

Swimming with the current is advisable, so you are influencing the direction of travel to your own benefit without being a blocker.

Using data to bring unique insights, alternative perspectives and ideas as well as quick win correction of errors is a key point of difference for a supplier and helps to deliver gross profit growth, away from simple cost of goods deflation.

Make use of your data.

 

Ian started his career as a buyer at Tesco, followed by several years in grey-market procurement and supply, as well as branded sales roles. He has been Commercial Director at Atheon Analytics for 12 years.

Atheon help FMCGs to make better use of their ‘Flow-of-Goods’ data through their service SKUtrak®

 

 
ian hall