Supplier Role

🎓 Definition

Several suppliers provide different products and Brands in a category. The Retailer will assign a specific role to the suppliers to successfully implement its category strategy.

For example, some suppliers will be leveraged to:

• Generate Volume (Traffic / Routine)
• Margin (Convenience)
• Innovation (Destination)

As it is critical for Retail Buyers to assign specific roles to specific vendors, it is also critical for suppliers to know which role they have been assigned, if this role fits them, and what they need to do if they want to play another role.

💡What roles can Retailers assign to their Suppliers?

Routine: Suppliers in this category deliver consistent competitive value products.

• Offer a competitive range of products at the best prices
• Average location with high shopping frequency
• The average frequency of promotional activities
• The primary role is to drive traffic.

Destination: Suppliers in this category consistently offer superior products, making the category a Shopping destination - Category of choice.

• Provide the best range of products at the best prices.
• High traffic, exposure, and dedicated space allocation
• High frequency of promotional activities
• Lead in market shares, sales, customer satisfaction, and service levels.

Occasional: Suppliers in this role engage seasonally.

• Seasonal or timely promotional activities
• Timely variety of Brands and SKUs offered to shoppers.

Convenience: Suppliers in this category offer good consumer value that is unique and not easily found elsewhere, promoting one-stop-shopping convenience.

• Provide a limited range of products.
• Aim to generate high margins.

❓What is Supplier Role used for

1. By assigning specific roles to Suppliers, Retailers ensure that each Supplier's objectives and actions align with the overall category strategy.
2. Assigning roles allows Retailers to allocate resources effectively. For example, Suppliers with a strong ability to drive traffic can be assigned to focus on customer acquisition, while others may be better suited for margin optimization or innovation.
3. Assigning roles also enables Suppliers to specialize in specific areas, leading to expertise and excellence in their respective roles.

How do Retailers determine which suppliers are best suited for each specific role, and what criteria are used in this decision-making process?

Retailers typically determine the roles assigned to suppliers based on various criteria such as the supplier's product range, pricing strategy, past performance, market share, and ability to innovate. Retailers might also consider factors like the supplier's reliability, adaptability, and alignment with the retailer's overall category strategy. This decision-making process often involves a comprehensive analysis of the supplier's capabilities and how well they fit into the retailer's strategic objectives for the category.

Are there any potential challenges or conflicts that can arise when suppliers are assigned specific roles by Retailers, especially if the supplier disagrees with or feels misaligned with the assigned role?

Yes, there can be potential challenges or conflicts when suppliers are assigned specific roles by Retailers. Suppliers may feel that the assigned role does not accurately represent their capabilities or strategic goals. This misalignment can lead to disagreements over pricing, promotional activities, and resource allocation. Additionally, suppliers might find it challenging to adapt to their assigned roles, especially if they lack the necessary expertise or resources. Effective communication between Retailers and suppliers is crucial to address these challenges and ensure alignment with the overall category strategy.

How frequently can a supplier's assigned role be reassessed or changed, and what is the process for this reassessment?

The frequency of reassessing or changing a supplier's assigned role can vary depending on the Retailer's strategic objectives, market dynamics, and the supplier's performance. In some cases, roles might be reassessed annually or during strategic planning cycles to ensure alignment with changing market conditions and business goals. The reassessment process typically involves reviewing the supplier's performance metrics, market share, customer satisfaction, and contribution to the category strategy. Retailers may also conduct regular meetings with suppliers to discuss their roles, address any concerns, and identify opportunities for improvement or realignment.