How to Automate Your Retail Promotion Management to Improve Profitability
The pressure is building
Let’s face it – the speed at which we shop and do business is faster than ever. The pandemic accelerated and solidified the permanent shift to ecommerce for retailers. Just as your customers now expect a seamless online experience in their purchasing journey, B2B customers now expect the same ecommerce purchasing experience as they do when making a personal purchase on Amazon. Your organization is facing new pressure to implement a B2B strategy to meet these demands including vendor promotion management.
As a retailer, your vendors also want to streamline processes that have historically been manual, cumbersome and slow with an online experience. McKinsey surveyed 1,000 B2B decision makers and found a lack of speed in interactions with their suppliers emerged as the number 1 pain point. Retailers are no exception to this – vendor contracts, rebates and incentives are complex and challenging to manage, especially when using offline spreadsheets and email. Scattered agreements and promotional calendars by vendor and channel can delay the efficient generation of volume, sales and profits. Because you are responsible for managing many vendors, it’s unrealistic to meet with all of them in person or even remotely.
Quick as a flash
Gone are the days of sitting in the same room with a vendor and creating a promotions calendar together. What used to be considered a standard process would now be considered clunky, hierarchical and slow. Even communicating via email is not quick enough to withstand the lightning-fast pace required to satisfy the needs of today’s consumers.
So, how can you make your vendor promotions process more user-friendly, fluid and interactive? Leading retailers are taking this process online to execute an ecommerce experience around managing promotions with vendors and suppliers. By transitioning to a digital approach, the management of vendor and supplier programs will be automated, optimized and executed instantly.
Go, greased lighting!
To harness the speed of automation, you need a robust back-end system complemented with a user-friendly front-end application that emphasizes usability and enterprise capability. This will allow you to effectively manage and negotiate favorable vendor incentives with your pricing and promotions programs.
At its very core, a retail promotions management system is a collaboration tool used to streamline vendor transactions. Here’s how it works:
- Vendors receive an automatic notification with the category manager’s offer, then negotiates or sends back an offer in real-time.
- Once the category manager approves one offer, the promotion and funding are created in the system.
- The winning vendor receives an automated notification, and then the system sends progress updates.
What once took days or weeks, now happens almost instantaneously with this automated B2B workflow. You’ll realize enhanced relationships with your vendors because you’re eliminating the frustration of a lengthy negotiation process. With all plans in one plan, you can reduce costs and errors since you will know the best promotion and volume to use in that category to achieve optimum profitability.