Re-imagining the customer journey in challenging times for retailers

Retail store of the future

Context

The organization operates as a prominent retailer throughout the Middle East, with various procurement teams dispersed across different countries. Each of these countries represents a distinct market share, and consequently, each procurement team wields varying degrees of purchasing power.

Challenges and opportunities

The retailer's negotiation practices with suppliers were inconsistently applied across different buyers across different countries. There was a lack of uniformity in the negotiation strategies and absence of a well-defined methodology to adhere to. The country-specific nuances were not fully leveraged, and follow-up on the total profitability was not systematically ensured.

Transformation Strategy

The key focus was to deliver sustainable impact by applying the following strategies:

Development and Standardization of an end-to-end Negotiation Methodology: A robust and comprehensive negotiation framework was constructed to guide all buyer negotiations, ensuring a standardized approach through playbooks across all operations.
Focusing on the Four Negotiation Priorities: We have defined four key negotiation priorities that form the backbone of all negotiation activities to reinforce the global strategic direction of the organization.
Country-specific Adjustments: The implemented methodology has been sensitively adjusted to consider the unique cultural, economic, and legal contexts of the Middle East.
Implementation of Regular Follow-ups: To maintain the total profitability that was negotiated during the annual negotiation, a system of regular monthly follow-ups has been established. These involve tracking key metrics, reviewing agreements, and recalibrating when necessary.

Results

As a result of our strategic transformation efforts, we have achieved significant milestones and observed positive outcomes:

The global-standard methodology, tailored to the organization's specific needs, has resulted in uniformity and enhanced efficiency in buyer interactions. The replicability of the negotiation process has streamlined the purchasing process and improved the overall operational efficiency.
The consistent emphasis on these areas has helped to align the buyers with the strategic direction of the organization. This alignment has contributed significantly to the efficiency and effectiveness of the negotiation process, reflecting positively on procurement outcomes.
The adjustment to local specificities has ensured that the approach is optimized for maximum effectiveness in the region. The result has been a more nuanced, effective negotiation process that takes advantage of local specifics to yield better outcomes.
The resulting increased vigilance on commercial margins has helped ensure that the margins agreed upon during annual negotiations are consistently maintained throughout the year.

Conclusion

The application of these strategic points has led to a notable improvement in the negotiation process, yielding better procurement outcomes and enhancing the efficiency of the buyers. It has also fostered stronger supplier relationships, and ultimately, contributed positively to the organization's bottom line.

Let's talk!

Business Case: Unlocking value by enhancing supplier negotiations capabilities