BUYER DECISIONS
Who Has The Power Between The Retailer And The Supplier ?
By Daicy Munee
Lately , the retail industry feels like a power play . A game where everyone seems to be flexing their muscles and trying to prove that they are better than their partners or competitors . Every player seems to have a string to pull when things are not working as per their expectations .
Retailers seem to have just another brand to grow , another brand to support , another brand to use in the games of proving that they have the power . While every supplier seems to have a new innovation , a new way to survive and another retailer to support in the not so friendly sector .
Customers on the other hand seem to be enjoying the games . But how would you expect them not to enjoy while they are the biggest beneficiaries ? In retail , customers are like the lady that every man wants , so she sits back , does nothing and enjoys the show and lets the best man win .
As the law of demand and supply dictates , for a balanced economy or sector , demand should always be equal to supply . This means that to have equal power play between suppliers and retailers , there should be as many retailers as there are suppliers . If the demand for retailers is high than their supply , then the power moves to the retailers than to the suppliers and if the demand for retailers is lower than their supply then they have less power .
This means that the fewer the retailers , the more power the retailers have and the less power suppliers have and the more the retailers , the lesser the power they have over suppliers . On the other hand , the more the suppliers , the more the products leading to very low power levels for the suppliers . The fewer the suppliers , the fewer the products , hence the higher the power .
The relationship between retailers and suppliers seems a lot like a marriage built on 50-50 , it seems to thrive more on preferential treatment between the parties and there must be mutual benefit for the marriage to be sustained and to thrive . It seems like a relationship built on love , trust , loyalty but most important , built on what each party has to offer . This is not the till death do us part kind of relationship or for better or worse kind of marriage , this is as long as you have my back kind of relationship . As long as you have something to offer . This is purely a conditional and
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Consumer preference is the only thing that determines who stays and who leaves . So , suppliers have a duty to ensure that the consumer chooses their brand over any other at whatever cost and the retailers have the responsibility to ensure they are the retailer of choice to the shopper . transactional kind of relationship .
The relationship between retailers and suppliers isn ’ t one that you ’ d describe as in health and sickness kind of relationship because one partner will always have a back up or a ‘ side chick ’ for moments when the other partner will not be feeling well and they ’ ll not be afraid nor ashamed to jump into bed with them . Most times , the back up is the other partners worst enemy , the one that they ’ d wish them death half asleep . The one that they frown at the mention of their name . The one that would make the other partner question their worth for the rest of their lives . And at times , the back up makes the other partner question the sanity of their partner for stooping so low and degrading themselves and their partners at the verge of relationship wars .
Sometimes , the partners are lucky to have an exclusive relationship with each other . Where the retailer is the preferred retailer to the supplier and the supplier is the preferred supplier to the retailer . This helps both the retailer and the supplier to have better collaborations and true integration , helps in reducing costs , operations are mutually aligned to the benefit of each party and that of the core customer which in the long run , work for the best interest of both . But this still doesn ’ t guarantee a ‘ till death do us part kind of relationship .’ It only guarantees a till your deal is the best deal I can sign kind of relationship .
But who would you blame for such a strained way of working between the retailers and suppliers when retailers are spoiled for choice on the products they need to put on shelf . Retailers are supposed to create and fulfill demand in the market . They are supposed to outsource the most economical products from suppliers and pass on the advantages to the consumers . Retailers
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