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Procurement management and brand negotiation in textile and fashion retail

Online retailing and innovative multi-channel concepts have increased customers’ expectations of brick-and-mortar textile and fashion retailers in terms of convenience and experience, while sales have slumped like never before due to the COVID pandemic. This makes it all the more important to develop strong brand partnerships and build a reliable supplier structure for the time after the pandemic.

Negotiating with international brands is a particular challenge, as internationally known and global brands are not interchangeable. In addition, partnerships with international brands often require long-term, personal and intensive cooperation.
We support you in optimally shaping your relationships with renowned brands.

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How to make brand negotiations a success

What are current issues retailers are discussing with suppliers?

What we are currently seeing in negotiations with international brands is a strong demand for online marketing activities. Retailers need to increase their online offer and invest in its marketing. They should create creative concepts and additional sales channels to increase interest in cooperation with suppliers.
In addition, retailers face the task of further developing their stationary business. For this, it is important that retailers give their suppliers room to test creative and unconventional concepts combined with appropriate marketing activities to build brand and image and thus create a solid offline customer base.

What are the most important points in the preparation of negotiations?

As we see time and again in our projects, the preparation phase is a crucial building block for a successful brand negotiation. This includes

  • a comprehensive quantitative and qualitative as-is analysis based on a TCO consideration in order to derive realistic negotiation objectives
  • the development of possible win-win situations
  • Developing a negotiation strategy with a clear distribution of roles, preparation of arguments and counter-arguments
  • Developing possible negotiation scenarios, preparing alternative plans and escalation scenarios

In the course of the annual negotiations, it is crucial to balance divergent wishes with a constructive and mutually beneficial strategy in order to shape a long-term partnership.

Why are regular negotiations so important?

Regular discussions are crucial to strategically develop one’s supplier and brand portfolio, build strong partnerships and, of course, improve margins. Unfortunately, most retailers do not have an annual calendar on the basis of which they conduct regular negotiations with their international brand suppliers. Because they see it more as a chore that is done once a year or less and then without significant preparation, they are giving away significant optimisation potential.

What are the most important levers for international brand negotiations?

The basis of every brand negotiation is a comprehensive overall assessment of the supplier, which, analogous to the total cost of ownership concept, includes all cost variables.
In general, the most important levers are:

  • The definition of a marketing or activity plan for the coming year.
  • The development of a common remuneration model for staff, who account for a high proportion of fixed costs.
  • Targeting the best retail concept with CAPEX investment by suppliers.

 

How does INVERTO support?

INVERTO can support negotiating buyers through a wide range of negotiation tools, benchmarks and coaching.
Specially developed tools for preparing and conducting negotiations form the basis for creating transparency and efficiency. Among other things, we can draw on a calculation tool that enables live simulations during the negotiation and benchmarks to peer groups. In addition, we have developed a benchmarking tool that enables procurement to set negotiation targets on the basis of quantitative comparisons with other suppliers, instead of having to rely on gut feeling when defining targets.

In addition to the tools described, INVERTO offers the possibility to support the preparation and execution of top brand negotiations by involving an INVERTO negotiation expert. Through our many years of industry expertise, we are familiar with the special challenges of negotiations. Our clients can flexibly decide, depending on their needs, whether we participate in the negotiation or whether we merely assist with the preparation.

 

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    What our clients say about us


    Maryne Lemvik, CEO Skanem AS

    „In an interactive sales training with a high degree of practical relevance, our sales staff learned how to approach negotiations like buyers. This change of perspective has decisively changed our sales negotiations. Thanks to INVERTO, our employees now feel better prepared and can draw on professional methods and tactics to achieve better negotiation results - a decisive step in the further development of our sales.“

    Ole Anton Gulsvik, CEO, Seven Seas

    „INVERTO conducted a detailed analysis of our international processes, and by introducing a new strategic approach for our procurement, it achieved substantial efficiency gains.“

    Patrick Juhl, Head of Procurement, Seven Seas

    „As a result of the central procurement organization implemented by INVERTO, as well as the pooling of demands, we were able to make double-digit percentage savings.“

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    Thomas Pfeiffer, Head of Product Development at willhaben.at

    „Together with INVERTO, we have achieved a result that we did not think possible at the beginning of the project. The overall package of tender preparation, service provider workshops and rounds of negotiations at top management level has raised our hosting landscape to a new level of price performance. I thoroughly recommend working with INVERTO.“

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    Dr. Jürgen Wickl, Managing Director of Styria Media IT

    „By preparing a functional specification, we managed to advertise requirements in a tailored way. INVERTO’s orientation towards precise customer requirements and benchmarks as well as professional negotiations has contributed significantly to the success of this project. The close involvement of employees in this structured tender process is an additional bonus, and something which will benefit us in years to come.“

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    Siniša Mitrović, mag.oec., Managing director, Styria Tiskara Zagreb

    „Due to the flexibility of the team, we managed to receive additional offers from suppliers and hence increase competition between existing suppliers. Through centralization of our former pick-up locations in Croatia and Bosnia-Herzegovina we managed to reduce the operational work for our employees. Furthermore, this centralization led to a huge additional revenue from our waste paper business. The project work with INVERTO was very professional and made this great result possible.“

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    Marc Lamure, Director, Montagu Private Equity Associates LLP

    „INVERTO has helped D.O.R.C. with the professionalization of the procurement organization and accompanied the supplier negotiations for various products and services. By implementing new processes and working with procurement staff, the achieved savings enhance sustainability and will result in a more profitable organization.“

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    Erwan Quemener, Purchasing Director, Chassis Brakes International

    „INVERTO helped us in raising undreamed-of sources of savings in both direct material and indirect material areas. They did not only identify these potentials but they supported us in the implementation phase with a great professionalism.“

    Nick Gerrard, CFO, MID Essex Hospital Services NHS Trust

    „INVERTO’s market and product knowledge have been invaluable in helping the Trust deliver substantial cost savings in a short space of time. They have the ability to talk the clinicians language, optimise the procurement process and deliver a result the trust could not have achieved itself.“

    Bart Stubbe, Vice President of Purchasing LINPAC Group

    „INVERTO are assisting LINPAC since early 2008 in transitioning from a decentralised to a category purchasing structure, bringing sourcing expertise, skilled resources, technology and methodology to recognise, create and release value to the company.“


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