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4 Challenges That Affect Supplier-Retailer Partnerships

4 Challenges That Affect Supplier-Retailer Partnerships

If the evolution of omnichannel offered a single, undeniable truth, it would be that your shoppers are literally everywhere. But with this shift in shopping habits comes the other side of the eCommerce coin: you need thriving supplier-retailer collaboration to keep the proverbial wheels turning.

Furthermore, mistakes or obstacles in the supply chain won’t stay confined to the warehouse floor. You’ll need to address the unique challenges that threaten to impact – and potentially weaken – your supplier-retailer partnerships quickly and decisively. If you don’t, they will eventually leak into the shopper experience as well. Simply put, as more shoppers demand instant access, round-the-clock accessibility and fast turnaround, you will need to know how to avoid these four barriers to successful partnerships.

Demand Forecasting

It benefits both suppliers and retailers to have a deep understanding of shopper demand. For one, demand forecasting helps suppliers keep the right amount of stock on hand. In addition, being able to accurately predict demand is essential for both parties to effectively meet shoppers’ expectations and improve their experience on- and offline.

According to a 2018 report that polled more than 140 industry professionals, nearly 7 out of 10 reported that demand forecasting represented their supply chain’s biggest challenge. This is likely because the cost of getting it wrong is so financially painful. An oversupply can mean you’re shouldering both opportunity cost sacrifices and warehousing fees. A lack of supply could essentially lead to lost sales. For this reason, many organizations are implementing models to overcome this obstacle, such as data mining methods.

The solution: Proactively approach your supply chain partners. Learn their systems, determine if they can integrate more closely with your own, and how you can serve up relevant data. Be open to being flexible – providing them with live or fresh sales data so they can see gaps in your inventory, gauge high demand times alongside your own teams, and preload or set aside inventory to compensate in real time.

Inventory Optimization

Make no mistake: in the world of warehousing, “pen and paper” is no longer a viable option. Manual processes are error-ridden and, in the high-demand, high-velocity reality of omnichannel shopping, those mistakes have a way of compounding at a startling speed. Shoppers are deterred by out-of-stock items, and this puts added pressure on suppliers to rush shipments to haphazardly make up the difference. In all, inaccurate stock tracking costs money, impairs the shopper experience and strains the supplier-retailer relationship.

To remain competitive, retailers need to have the right products when shoppers need them. Not surprising, nearly 60% of retailers polled are investing their tech budget dollars into inventory management systems.

The solution: Make sure your own inventory data is recent, automated, and recorded in an easily-accessible format in order to build trust. If you can share current, actionable data – e.g. stock levels – with your retailer partners, they’re more likely to be forthcoming with information on observed trends that can be fed back into your demand forecasting – and potentially even research and product development.


Optimization naturally feeds into visibility: as you gain more insight and control of your inventory, it’s beneficial to share that information with retail partners. Achieving better visibility over existing inventory helps retailers effectively manage both the cost of their goods and shoppers’ expectations.

Full visibility is – and always should be – the goal, as any systematic changes need to take all variables into account to be effective. However, only 17% of retailers say they have full visibility over their inventory –  including in stores, in transit, in returns. And unfortunately, very few retailers manage it as part of their workflow, even though it consistently makes corporate to-do lists.

The solution: Don’t treat visibility as a “nice to have” in the hierarchy of workflows. Make it as much of a line item as, say, offloading a pallet, or sending a certain amount of shipments each day. If you don’t prioritize it, it will inevitably drift to the back burner and you’ll find yourself chasing the “ripple effect” of errors that arise from the opacity. Determine where your visibility rests now, and loop in all stakeholders – particularly those with “boots on the ground” for inventory-checking – to weigh in on the best way to achieve full inventory visibility with both speed and accuracy.

Customer Experience

Thanks to omnichannel shopping, customer experience (CX) has emerged as a key metric when measuring supply chain performance. While customer service satisfies the immediate person-to-person needs, CX encompasses much more. It also involves delivering meaningful interactions and communication at multiple touch points throughout the buying journey.

As a result, 46% of retailers suggest that supply chain leaders are held accountable for CX. And suppliers can bolster and support better experiences by refining their tracking and tracing for shipments, collaborating with data (e.g. noting patterns in ordering, items often paired together, and so on), and reinforcing a trustworthy supply chain.

The solution: In order to have a measurable positive impact on CX, suppliers/ manufacturers need to collect and distribute their shipping data in a format that “translates” easily. Seamless integration works best with readily-recognizable tracking numbers, such as those from UPS, USPS, or FedEx, and labeling on shipments rather than in-house ticket numbers that won’t have much meaning in the logistics chain. Clean data expedites everything from initial shipments to repairs to reverse logistics – improving CX throughout the entire shopping and product life cycle.

With the rise of eCommerce, shoppers have a wealth of options at their fingertips, which means that it’s more important now than ever before for suppliers and retailers to have effective, collaborative relationships. Working in tandem will help eliminate these “red flags” that threaten to hinder supply chain operations and, in turn, damage these partnerships. This process ensures that suppliers enjoy consistent, high-volume orders, retailers enjoy superior brand perception and loyalty, and shoppers receive an experience that not only entices them to return, but to return with friends, family, and peers.