Pull back the curtain to build trust

While the news may focus on social media backlash against retailers based on customer service issues, politics or polarizing trends, what I’m excited to see in social media is a new brand vulnerability.

Companies are inviting customers behind the scenes to share how their products get to the shelves of their favorite stores. It’s driving customer affinity, and with that comes value, both in new customers and repeat purchases. Some examples:

• Betty Jo’s Ice Cream shares how they have gone from social drops to a pop-up location in their popular video.
• Kikiz Cosmeticz gained thousands of likes for sharing how they ship their orders.
• Batch Cookies celebrated their path from a farmers market tent to a new storefront.
• Bobbie Goods and Fayt racked up over 100K combined views with their warehouse tours.
• Waterbody shared how they got their skincare line sold at over 100 retail shops.
• Carpe, with over 25K TikTok followers, posts regularly from their warehouse, not only about their product but their process.

How SupplierWiki makes supply chain fun and useful

SPS Commerce is learning from this approach. At SPS SupplierWiki, we’re leaning into this trend and translating the fascinating, complex world of retail supply chains into bite-sized stories, explainers and tools.

As we dig into the details of retailer relationships, including quick explainers on how planning, compliance, and fulfillment all align, SupplierWiki brings the “how it works” magic into the mainstream.

The big idea: make supply chain the star

Supply chain is no longer something you need to hide behind your marketing, it is marketing.

By showing the behind-the-scenes work that goes into moving products to shelves, brands can spark curiosity and build loyalty. And it doesn’t look like more promotional noise.

Because when customers see what it takes to get their favorite items from the warehouse to the store shelf, they don’t just like the product, they feel part of the journey.

Start to explore and keep informed

Our online knowledge base is free and easy to browse for topics that interest you. Check out the hundreds of resources available at SupplierWiki today.

To successfully meet demand, suppliers need effective strategies to keep and move inventory quickly as well as modern technology that maximizes supply chain efficiency.

Is your inventory management up to speed?

Effective inventory management ensures that the right products are available at the right time and in the right quantities. For suppliers, this reduces carrying costs, minimizes stockouts and improves customer satisfaction.

But if you’re not keeping up with demand, you’re risking both profit and relationships. Consider the following strategies to practice better inventory management.

Decentralize your inventory

A key tactic for strategic inventory warehousing is decentralizing inventory. Instead of storing all inventory in one central warehouse, a decentralized approach spreads it across various locations, often based on geographic distribution of customers.

Decentralization is especially helpful for:

• Companies with a large geographic footprint: Businesses operating across a wide area with diverse customer bases can have inventory distributed across regions.
• eCommerce retailers with multiple fulfillment centers: Online retailers can deliver products from warehouses closest to the customer’s location.

The benefits to suppliers include:

• Reduced lead times and faster delivery: When stock is closer to customers, businesses can fulfill orders quickly and manage high demand in specific areas.
• Improved service levels: Closer proximity to customers enables suppliers to respond more quickly to demand fluctuations and avoid stockouts.
• Risk mitigation: Supply chain disruption effects are reduced—if one location is disrupted, other locations can still fulfill orders, minimizing impact on overall sales.
• Enhanced flexibility: Decentralized inventory allows suppliers to adapt to regional demand variations and customize inventory levels based on local preferences.

Use micro fulfillment centers

Another warehousing strategy to consider is the use of micro fulfillment centers (MFCs).

A MFC is a small, automated warehouse that stores and ships online orders. MFCs are often located near customers to reduce delivery times and costs.

The benefits of MFCs for suppliers include:

• Proximity to customers: Strategically locating near urban centers reduces delivery distance and time, enabling faster order fulfillment and delivery.
• Automation: Using technologies such as robotic picking and conveyor belt systems streamlines order processing, reduces labor costs and increases order accuracy.
• Scalability: MFCs can be scaled up or down based on demand. During peak seasons, additional MFCs can be activated to handle increased order volumes.
• Cost efficiency: Reducing the need for large, centralized warehouses and long-distance transportation can lower overall supply chain costs.

Maximize inventory delivery

Today’s consumers expect fast and reliable delivery with every product purchase. Key strategies for suppliers to enhance delivery speed include:

• Efficient warehousing: Ensure warehouses are well-organized and equipped with technology to streamline the picking, packing and shipping processes, including a fulfillment solution that upgrades manual EDI processes.
• Advanced logistics: Use advanced logistics solutions, such as route optimization software and transportation management systems (TMS), to help optimize delivery routes, reduce fuel consumption and minimize delivery times.
• 3PL collaboration: Partner with third-party logistics (3PL) provider for expertise, infrastructure and resources that can help suppliers meet delivery expectations.
• Last-mile delivery innovations: Consider innovations such as drones, autonomous vehicles and crowd-sourced delivery services to improve last-mile delivery efficiency.

Optimize efficiency with technology

Using technology that provides real-time information enables suppliers to make informed inventory decisions. Solutions to consider include:

• Demand forecasting: An analytics solution enables accurate demand forecasting to allow suppliers to predict future sales and adjust inventory levels accordingly.
• Real-time inventory tracking: Technologies like RFID and IoT sensors can improve inventory visibility and accuracy and provide up-to-date information on stock levels.
• Automated replenishment: Replenishment systems trigger orders when inventory levels fall below a set threshold to ensure continuous supply and reduce stockouts.
• Inventory optimization: Techniques such as ABC analysis and just-in-time (JIT) inventory prioritize high-demand products and reduce excess inventory, while centralized fulfillment operations give better visibility into demand.

Best practices and better technology keep your inventory on the move

When you take stock of your current inventory management strategies, embrace new tactics and integrate key technology, you can improve your supply chain efficiency to meet customer demands and maximize your sales and profits.

SPS Commerce is ready to support you with the tools and expertise needed to simplify your day-to-day operations, unleash the power of data insights and grow your business.

To learn more about how to improve your business processes and drive your business success, contact us to begin the process.

For suppliers, adapting to seasonal demands helps you meet retailer expectations and capitalize on market opportunities. And when you align more closely with the demands of your retail trading partners, you can strengthen your relationships and optimize profits.

Read on for key strategies for suppliers to better align with retail seasonal demands.

Collect the data

Before you can plan for the future, you need to know where you’ve been. For suppliers, this means gathering complete and accurate sales and inventory information.

Ideally this would be a simple task—but in reality, suppliers face challenges including:

Limited data availability: If your information has been gathered or tracked with manual processes, or sales and inventory data is siloed in different systems, it’s not only difficult to gather complete information, but also an invitation for error. To ensure your data is clean, accessible and reliable, consider integrating your data into a centralized business platform.

Poor internal collaboration: When departments are siloed, forecasts can be derailed by misaligned goals and initiatives. Implementing Sales and Operations Planning (S&OP)—a monthly sync between marketing, production, inventory management and sales—enables you to coordinate all your business areas with shared goals for more effective forecasting.

Incomplete historical data: Having access to less than three years of historical transaction and inventory information—whether from outdated manual processes, rapid growth or changing personnel—may skew analysis due to sporadic or one-off trends rather than insights that are truly seasonal or situational.

Lack of visibility into retailer data: A true alignment with your retail trading partners requires access to their sell-through data. This not only gives you a better understanding of product demand, but also provides insights into seasonal trends by location, product or customer.

Analyze the trends

Once data has been collected and cleansed, demand planning and forecasting can follow.

Demand planning predicts upcoming demand for products, using the information gathered to adjust output, balance inventory levels and ensure you can fulfill your trading partners’ orders on time and in full without stockouts.

Innovative tools like SPS Analytics can help companies clean and apply market data quickly. To accurately predict needed inventory, analysts can use historical data and current trends to understand demand. With these insights, you can improve allocations and orders to match demand, maximize-sell through and stay on top of trends.

Communicate with your retailers

Including your trading partners in the forecasting process enables you to share your understanding of product demands and align with their business goals. This sharing of data-driven insights not only builds trust in your recommendations but also adds value to your partnerships.

To ensure you remain on the same page, it’s crucial to have reliable, timely communications.

Streamlined communications enable close collaboration with your trading partners and boost forecasting accuracy. EDI solutions with real-time communication channels allow you to consolidate and organize your supply chain and stay ahead of shifting demands.

Work your plan

When you’ve developed a clear picture of seasonal demands through solid forecasting, you can determine the necessary materials and equipment to meet your production goals and schedule production to meet your retailers’ needs.

To keep your forecast plans on track:

Coordinate labor and production timelines to ensure timely deliveries of products that meet retailer demands.

Maintain timely communications to ensure you’re sharing accurate information so you can adjust to meet shifting demands with an agile supply chain.

Reap the rewards, and repeat

When you use data-driven insights to forecast demand, collaborate with trading partners to adjust your production and supply plans, and align with shared goals and timely communications, you can look forward to not only better relationships, but maximized sales and profit.

SPS Commerce can support you with the tools and expertise needed to take advantage of this proven formula for successful demand planning that you can repeat in every season.

To learn more about how to implement demand planning into your supply chain, contact us to begin the process.

Understanding what’s at stake

For grocers, retailers, distributors and foodservice companies, FSMA 204 means capturing and maintaining detailed data from every supplier. This includes Key Data Elements (KDEs) like lot codes, harvest dates and critical tracking events. While compliance is essential, standardized and accurate data also plays a key role in recall management and daily operations.

Consider a typical scenario: Your suppliers range from large producers with sophisticated systems to small suppliers relying on spreadsheets. When a safety issue arises, your team must quickly trace affected products across your network. Without standardized data, this process can take days instead of hours, putting operational efficiency, customer safety and your reputation at risk.

Poor traceability impacts every aspect of your business. Inconsistent and inaccurate data leads to inventory challenges like overstocking or stockouts, while inefficient recall processes can escalate into costly crises. Most importantly, inadequate traceability undermines consumer confidence and brand loyalty.

The importance of supplier buy-in

Success requires making traceability manageable for suppliers of all sizes. Leading companies are taking practical steps like:

• Implementing uniform processes for recording and reporting traceability data
• Using automation to minimize errors and enable real-time data exchange
• Setting clear expectations and guidelines for accurate traceability data
• Supporting suppliers with training and implementation resources

By automating data capture through standard business documents like purchase orders, ASNs and barcodes, companies can help suppliers maintain consistent data formats while protecting their brand.

SPS Commerce and iFoodDS: A collaborative solution

Recognizing the need for enhanced traceability and supply chain visibility, SPS Commerce has partnered with iFoodDS to expand our retail cloud service offerings. Through integration with iFoodDS Trace Exchange™, we provide a comprehensive solution that supports the largest grocers, retailers, distributors and foodservice companies, along with their supplier networks.

With a high-tech, high-touch approach, our combined solution simplifies data collection and standardizes traceability processes across your trading partner network. Our team works with suppliers of all sizes and technical capabilities to drive successful participation and efficient FSMA 204 compliance.

For more information about how SPS Commerce and iFoodDS can enhance your traceability and supply chain visibility, visit SPS Commerce or iFoodDS.

This creates a complex balancing act for retailers who need to keep shelves stocked with the right products at the right price while also reducing their environmental impact. Miss either mark and retailers risk losing sales, customer loyalty and brand value.

Why sustainability matters now

Modern consumers are pushing retailers to think differently about how products move through the supply chain. But the shift toward sustainability isn’t just coming from consumer pressure. Here are other factors driving change:

• Supplier business practices matter more than ever, as retailers need partners who share their commitment to sustainability and can support a green supply chain.
• Investor pressure continues to grow, as environmental, social and governance (ESG) factors become key drivers in investment decisions.
• New regulations mandate that large organizations report on their environmental practices, including the emissions stemming from their supply chains.
• Supply chain risk management has taken on new importance, with sustainability helping protect against disruptions from environmental issues, regulatory changes and social concerns.

Collaboration is key

The sustainability challenge extends far beyond a retailer’s own operations. To achieve sustainability goals, retailers must collaborate closely with their suppliers. According to CDP, supply chain emissions are typically 11.4 times higher than operational emissions. While nearly 70% of retailers are already working with suppliers to improve sustainability, retailers face two significant hurdles: getting accurate supplier data and driving meaningful supplier engagement.

That’s where the partnership between SPS Commerce and Optera comes in. The Retail Sustainability Collective combines over 20 years of supplier network expertise from SPS with Optera’s leadership in supply chain emissions management. The partnership applies a proven data collection framework to sustainability metrics, creating a streamlined approach for both retailers and suppliers.

For retailers, this partnership delivers:

• Comprehensive primary emissions data across their entire supplier network, moving beyond category averages
• A unified solution that bridges sustainability and procurement teams
• Expert support for supplier outreach and response validation

Actionable insights for emissions reduction based on actual supplier data

Suppliers benefit from:

• A single, standardized data process for sharing emissions data with their retail customer network
• Built-in calculation tools for companies new to emissions reporting
• Valuable benchmarking insights to improve sustainability performance

The journey toward sustainable supply chains requires both expertise and scale. Through the SPS Commerce and Optera partnership, retailers can build resilient, efficient and environmentally responsible supply chains that meet both customer expectations and corporate sustainability goals.

For more information about the Retail Sustainability Collective pilot program, contact Scott Williams at scott.williams@spscommerce.com.

Optera helps corporations measure, manage, and reduce their carbon emissions up and down their value chains, backed by comprehensive and trusted data. Learn more.

According to the report, “Debunking the Retail Apocalypse,” for every chain with a net closing of stores, 2.7 chains show a net increase in physical retail locations in 2017. Further, just 16 chains account for 48.5 percent of the total number of stores closing, while five of the 16 — RadioShack, Payless ShoeSource, Rue21, Ascena Retail, and Sears Holding — were 28.1 percent of the total closings.

Meanwhile, more online/e-commerce retailers are opening stores and pop-ups, such as Bonobos, Warby Parker, Frank & Oak, and of course, Amazon.

The online giant has not only opened a retail grocery store in Seattle and taken over hundreds of Whole Foods stores, they’ve now opened their sixth brick-and-mortar store, this time in NYC. It works like both a showroom and a regular store, allowing shoppers to order books online to be delivered to their homes, or buy in-store books via the Amazon app (Prime members get to pay online prices, while non-members pay full retail).

Amazon isn’t the only one breaking new ground. The big box stores — primarily Target, Walmart, and Best Buy — are offering new services like buy online pickup in store (BOPIS), curbside delivery, and in some cases, even home delivery. Smaller grocery stores like Kroger have begun offering home delivery as well as curbside pickup, with an additional fee, of course. Walmart has also begun offering discounts to shoppers if they use BOPIS as well.

Brick-and-mortar stores and other physical retail locations (such as pop-up stores) are now and will continue to be a vital component of retail for the foreseeable future. Remember, at this point e-commerce sales still only account for around 12 percent of retail sales (and growing). The majority of sales of goods in the U.S. still happen in retail stores and studies have shown that the demographic with the largest spending power right now, the Millennial generation, still love shopping in stores.

Can you add more value to existing stores?

As I said a few months ago, retailers that are opening more stores are focused on value delivery to consumers,” often in the form of low-price goods. Not cheap goods, per say – Bonobos, Warby Parker, Frank & Oak, and Amazon are focused on high quality for good value, not necessarily a low price.

In more and more cases, though, it’s not just about value, it’s about experience and shopper engagement. It means providing top notch support and additional services to consumers. And by offering some of these services, you can extract some additional value from your stores. Here are a few things you could do to add value for each of your physical retail locations.

• Offer home delivery. Supermarket chain Kroger has begun offering home delivery for a fee. Customers order online and their products are picked, bagged, and show up at their house four hours later. One article stated the cost is $11.95 for home delivery, so it may be a bit costly to do every time. But imagine how much parents with young children would appreciate not having to leave the house when a child is sick or they’re too busy.
• Offer curbside pickup. The article also quoted a $4.95 for curbside pickup at Kroger. I can think of a lot of people who would gladly pay $5 if they didn’t have to walk into a grocery store and fight the crowds. Walmart offers free curbside pickup if you order more than $50 worth. Again, orders are placed online, they’re picked and bagged, and then a pickup time is scheduled. The customer drives up, the order is loaded, and they drive off.
• Buy online, pickup in store. Also referred to as BOPIS or BOPUS, this means the customer has to actually walk into the store. But it does one thing that even the curbside pickup doesn’t offer — intra-store delivery. Best Buy will ship a piece of equipment from a store across town if customers don’t want to make the drive themselves. And it’s faster and cheaper than home delivery, and it allows stores to upsell items or sell accessories to the original purchase.
• Share knowledge.. Sephora, No. 1 specialty beauty retailer in the world according to Euromonitor International, got to the top in part due to sharing their own deep knowledge of the category, as well as their customers’ tips and tricks using their products, all over YouTube, Instagram and other social channels. Do you have products or services you can teach your customers about?
• Hold special events. Bookstores have readings and author signings, music stores have open mic performances and jam sessions, grocery stores offer cooking lessons, and clothing stores have fashion shows. Home improvement/hardware stores often hold classes on projects that range from building a birdhouse to planting a tree to changing an electrical outlet. Of course, these are all done with tools and items available at the store, so it’s also a great sales tool. By providing experiences for your customers, you help them feel closer to your brand as well as find a new community of people who share their interests.

The retail store isn’t dying; they’re transforming from shelves and square footage to the four-walled centers of consumer experience. It may be hurting some retailers that are having a hard time adjusting to the new reality. But as specialty retailers are proving, retail experiences are a path to growth and success.

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This is the basic concept behind the Value-Added Partnership. The idea for Value-Added Partners (VAP) is based on the concept of Value-Added Resellers (VARs). An example of a VAR is an IT company that resells software and hardware with additional customer services included, such as uptime checks or offsite data storage. Car dealerships can also be VARs by adding additional features, such as custom parts and services, like special oil changes.

For many years, success favored the giant companies because they had the most power. Now that’s all changing – the most agile businesses to bend to consumer expectations are winning. Thanks to low-cost-but-more-powerful computing and communication, plus being able to react and pivot more quickly than large companies, the competitive advantage is tipping back toward the smaller companies and the natural partnerships that can develop between them. Each company provides one part of the value-added chain, and coordinates its activities with their other partners. As a result, each company plays a role in the success of the other participants in the chain.

But you don’t just want to enter into such a partnership without some research. You want to make sure your VAPs are technically and financially strong business partners. You want to be able to trust them too, as some partners in VAP relationships will even share information, assist each other, and cooperate on orders for large clients.

The information sharing can include sharing order data, sales information, or product information. The technology that makes it possible for retailers and suppliers to communicate can also help VAPs communicate more easily with each other.

How can suppliers evaluate value-added partners?

This is where SPS Commerce’s Retail Community network can come into play. This tool can be used by retailers to find new suppliers, vendors to locate new retail partners, manufacturers to find raw material suppliers and make other valuable connections. Each member of the network has a business profile that describes a lot about their products, businesses and available services. Additionally, considering asking these questions of each prospective value-added partner.

What is this new company’s niche? What kinds of consumers and customers do they attract? Will you be reaching the same kinds of customers, or will you each be increasing your overall reach?

What’s the health of their sales? Are they fairly healthy, or do they fluctuate in their revenue? Uneven revenue can cause you some revenue problems of your own, so make sure you consider what potential financial health problems might do to you.

How automated in their supply chain? Do they use EDI, or is everything still being entered by hand? Do they even have an ERP system in place? Is it compatible with yours, or do you have a system that can translate? Fast and accurate communication is key to a good value-added partnership.

Are they any good at marketing? How well do their own promote products, and do they have a plan for promoting your products? Does the retailer’s product mix compliment or competes with your product line? You want VAPs to align well with your business so you can benefit from their network as much as they can benefit from yours.

Are they hard to do business with? What are your business and technology requirements? What are their business and technology requirements? How do they match up? Define what either parties would need to do in order to work a viable partnership, estimate what it would cost to do so and evaluate whether the investment would be worth the returns.

Finding Value-Added Partners can go a long way to extending the reach and territory of any supplier reaching into the retail community. And while you’re gearing up for the busy season, it’s a great time to look towards the future and put together a plan with other like-minded suppliers to attract retail buyers.

If you would like to learn more about our Retail Community, EDI, or other cloud-based software products that can help your company grow and prosper, please ask to speak with one of our associates.

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In fact, during sourcing meetings between retailers and suppliers at the SPS Commerce In:fluence conference last month, the first question almost all retailers asked was if a supplier could drop ship. Only after this condition was met did questions follow about products and assortments.

So what’s the best way for suppliers to start drop shipping? It helps to think about it in parts. For starters, it typically only impacts these two areas of your business:

1. How you receive orders
2. How you ship orders

And what you need to do differently in these two areas will require updates to:

• Your processes
• Your technology

On the process side, here’s a quick checklist of tips and considerations to keep in mind:

[   ] Verify you have the infrastructure to handle this.

Drop shipping replaces fewer bulk orders with a far higher volume of smaller purchase orders and invoices, which will require more people and systems on your end to manage efficiently.

[   ] Have trading partner agreements in place.

This documentation is where the critical details get finalized, including how you and your retailer partner will handle product returns, set delivery timeframes with consumers and divide shipping costs.

[   ] Prepare to provide more real-time updates.

Retailers will expect to be notified of the order status and each time you ship to a customer, so that their customer service teams can stay in the loop on order status. They will also need periodic updates on inventory position, ranging from hourly to daily.

[   ] Be ready to set some inventory aside.

For their own business protection and peace of mind, many retailers will ask that you allocate a certain amount of inventory exclusively to them.

[   ] Beef up your item information capabilities.

Retailers demand fast and easy item attribute setup in their systems, and you’ll be on the hook to get them the product detail they need to support their online selling efforts.

[   ] Custom packing slips will be required for each retailer.

Consumers should be unaware that an order came from you and not a retailer’s warehouse. To this end, you’ll need to manage a custom, branded packing slip containing carton content plus the return information for each retailer you serve.

Watch for another post soon covering key technology considerations for becoming drop-ship capable, along with an overview of the options available for getting your business ready.

Ready to start drop shipping? Contact SPS Commerce today, we’ve helped hundreds of vendors grow their business with drop-ship capabilities and can help you too.

Want to learn more about drop shipping?

Are you a Retailer, Supplier or 3PL wanting to learn more about EDI requirements for drop shipping? Learn about drop shipping benefits, fulfillment options and which electronic data transactions make it work based on your business type.

EDI Guide for Drop Shipping