Retail Dude

CRM (Customer Relationship Management) is regarded as key to the success of any Retailer. Most of the retailers across the globe are investing in Customer Retention and Loyalty Building Programs. In case of a Specialty Retailer who caters a niche variety of product, these can be achieved by well designed CRM Program. But in case of Large Format Retailers like Wal-Mart, Tesco, IKEA or Big Bazaar for that matter, it will not be solely depend on CRM, though it plays an important role. Customers of such Retailers expect Best deal in comparison to others and 24X7 Availability of products. Thus Supplier Relationship Management (SRM) plays pivotal role in success of Large Format Retailers.

SRM is a process which helps Retailer in identifying there key suppliers and integrating them in there business to create a win win situation for both the parties. SRM fills the gap between suppliers and retailer’s understanding of market demand and thus create a win win situation by aligning retailer’s sales plan and supplier’s manufacturing plan together. It ensures that retailers get the best contract and suppliers get long term commitment. Moreover it eliminates the possibility of any kind of dispute between both parties by bringing them on same page in regard to all policies like returns, facing, pricing etc.

The process of SRM can be penned down as follows:

• Identification of potential suppliers based on qualification required.
• Evaluating and selecting suppliers on various parameters like product, price, capability, background, brand etc.
• Entering into agreement with selected supplier in terms of price (term of sale); return policy, ordering policy etc.
• Identifying key suppliers in different product categories based on sales volume and demand of product.
• Selected strategic suppliers will be CPFR (Collaborative Planning Forecasting and Replenishment) Vendors and will have limited access to Retailers Sales Plan so that they can align there Manufacturing Plan accordingly.
• Retailer need to regularly monitor the performance of Suppliers.

In my next post I would be discussing on CPFR in detail

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- Rajeev Damani

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I’ll start with a quote

“Collaborating with competitors involves yin and yang, two opposing and simultaneously complementary facets of a single phenomenon. This balance can create substantial value, particularly when the collaboration involves common processes that provide no competitive advantage.”  By Evan Rosen.

This was used, as recently as yesterday, by none other than the doyen of Modern Indian Retailing, Shri Kishore Biyani. He was concluding his key-note address at the Retail Summit : 2008.

Collaboration remained the agenda of his speech, which he admitted, was a very different strategy in today’s “New World Order”. In the same breath, he also admitted that his own speech, last year, was based on the ”Old World Order”.

It’s a pleasure. To find that our retail-gurus have finally removed their blinkers, in a hurry!

Hang on, hang on! Have they? What are the possible “collaborations” he’s touched upon?

Sourcing of merchandise, HR, Real-Estate & some other necessary services required by all organised retailers. Now, I’m not sure if ”these” could be called ”collaborations” in the real sense of the world or even by the quote above! This looks more like another word that starts with the alphabet C too: Cartelisation!

The Sales-Logistics-Marketing gurus attending the seminar would have definitely risen in unison when KB closed his address. To applaud. After all, terms like “collaboration” have this unavoidable connotations with others like “teamwork, networking, partnerships etc.”, all very “current”.

Our neighbouring country is keen to collaborate with us……on burning issues.

The august congregation inside the auditorium were, hopefully, sharp enough (sharpened by their enviable alma-maters, then their fast-track career demands & so on so forth), to read between KB’s bold lines. So, the applause must have been genuine!

Yes, we all love collaborations, as we all were born of at least one (notwithstanding Mamma Mia)!

Borrowing again from Rosen “yin and yang, two opposing and simultaneously complementary facets of a single phenomenon”, I’d have thought a different way to collaborate, for “real-success”.

Have the doyens considered collaborating with millions of mom-and-pop store across the country, ever?

That, can really turn out to be the latest definition of “collaboration”.

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There has been tremendous change in Warehousing Model in past few years. Traditionally Warehouses were required only to deliver goods to stores. It was responsibility of stores to future make it available to customers. But with changing retail business and growing multichannel retailing, warehouses also need to deliver it to store as well as to customers placing order online or through catalogue or any other model. So, with this the traditional idea of having few big warehouses doesn’t work anymore. This led to evolution of Regional Warehousing and Multi-Warehousing. The idea is to have multiple regional warehouses to meet demands of customers.

With multichannel retailing, lead time for deliveries has also changed significantly. Traditionally stores use to order a week in advance, but with online retailing and all, consumer want their product in three days and even next day in many cases. Not only this, they even expect it to be gift wrapped. So, this requires regionalization of warehouses.

 This trend has not only changed warehousing, but has also changed the transportation used for delivery. Traditionally, LTL (Less than Truck Load) and Large Trucks delivering to multiple stops were used. But now with this new model of warehousing, smaller trucks and straight trucks are used more. These trucks are used as there are lot of residential deliveries these days.

This shift in industry has also led to growth of 3^rd Party Warehousing and Collaborative Warehousing.

-          Rajeev Damani

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