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.

 

How to make brand negotiations a success

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.

 

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.

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.

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.

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.

 

Our experts on the topic of brand negotiation

Michael Strohschneider

Principal

michael.strohschneider@inverto.com Contact

Frank Wierlemann

People Chair & HR | Managing Director

contact@inverto.com Contact

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