When I got my first job as a Graduate Trainee Buyer, I always remember my boss refused to let me participate in negotiations until I had a better understanding of what was expected of my role as a Buyer. ”You need to learn the tools available to you, learn about your product category so that you can negotiate with authority and earn supplier confidence and respect”.
I quickly learned from such tough, successful professionals the art of negotiation, communication, respect and innovation.
Why have these attributes changed today?
The Rise of the Global Deal
Big companies make ‘big deals’, the more global the better. This is without a doubt a huge financial benefit and makes great sense on paper. But how many of these ‘big deals’ actually put the customer first?
How much is pandering to the power of the large supplier to force their extended distribution?
What is the cost to the overall product offer and customer experience which, given the enforced change to retail in the current times, will be even more important?
These deals are lucrative for the bottom line and, of course, the Finance Directors applaud. However, this is not dynamic retailing!
In most of these ‘big deals’, made at the highest level, buyers are told which products/brands they must buy, what space they must allocate and which promotions they have to run. It’s a huge frustration for a buyer to be handcuffed to a product that must be given shelf space – regardless of the market positioning or customer needs.
What retail space is left for creativity, innovation, discovery and newness – elements which stamp the individuality of the buyer?
The global deal is not limited to certain categories and has been a strategic move to reduce the number of points of contact, improve terms with key suppliers and streamline the business.
Some categories with a higher share of the space mix can ‘swallow’ these deals more easily than others, making it a lucrative strategy.
However, in Fashion and Accessories, space is generally much more limited, resulting in a predictable collection of brands governed by global deals and a distinct lack of innovation.
Loss of Customer Focus
I believe a great buyer buys with passion and integrity. They balance things, using gut instinct coupled with hard facts, whilst also managing risk and are extremely knowledgeable about their category and the products they sell.
The best buyers lead negotiations, regularly review new potential products, have an appetite to learn, and are responsible for driving category performance.
Based on feedback from my recent webinars, many buyers currently lack confidence due to lack of training, experience or time restraints, their role being largely reduced to administrative tasks.
Buyers are more reliant on the suppliers to propose the ranges/products/brands, leaving them in a much weaker negotiation position and showing a lack of knowledge, talent and flair. Suppliers do this to limit risk for future markdown, but this also limits potential sales.
Many suppliers now present a Travel Retail Selection, a limited range of core lines under the guise of simplifying the process for the buyer and avoiding out of stocks.
I completely disagree with this ploy as, although customers may ultimately purchase best sellers, they will not be drawn in by them.
A core range lacks interest and novelty, effectively culminating in a boring offer, which translates to an uninspired consumer and limited sales.
If Travel Retail is to compete with the High Street and Online competition, it cannot offer a dumbed-down range.
Innovation and Risk
The road ahead is one of uncertainty. How will customers react to bricks and mortar shopping again? What is the ‘new normal’? One thing is certain, retailers must accept that the customer will be savvier than ever.
Customers have embraced online shopping, by necessity, and are now far more aware of online choices and the competitive prices as they can access the competition in seconds.
The price saving in Travel Retail has long been its sales magnet. However this will not be enough to attract customers in the future, especially where pack sizes prevent customers from a direct comparison. The channel needs innovation and risk-taking to inspire and convince customers.
This is where buyers need to be given more headroom, freed up to do some real buying, be creative and think differently. Be prepared to try new solutions.
This is the time to:
* Invest in training your buyers on how to develop a category, not just make listings and report sales
* Nurture the unique qualities of good buyers, giving them confidence to stand out and think creatively
* Encourage diary space for buyers to see newness, new brands, new products and new concepts
Isn’t it time for buyers to be the force behind a ‘NEW RETAIL’?