Turning indirect sourcing into a multimillion-dollar profit center

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Retail is facing massively declining margins and is struggling—and losing—against e-commerce. We highlight the case for change, and offer guidelines on getting next-generation, business-backed not-for-resale sourcing.

The retail industry is facing massively declining brick and mortar margins as it is struggling—and losing—against e-commerce. The Wall Street Journal recently reported that retail margins decreased from 10.5% in 2012 to 9% in 2016, as online revenues increased from 10.5% to 15.5% of total sales during the same period. Credit Suisse has estimated there will be 8,600 store closings this year in the US alone, which is more than the total number of closings during the 2008 recession.

To tackle this unparalleled challenge, retailers must embrace best-in-class strategies to capture value across all their spend. This recently published Retail Procurement white paper, “Turning indirect sourcing into a multimillion-dollar profit center,” highlights how critical it is to put in place and optimize the right kind of not-for-resale (NFR) strategic sourcing organization in order to drive the greatest value in NFR spend. The authors – Steve Hoffman, Patricio Ibanez and Britta Lietke – describe the case for change, including powerful retail examples, and provide guidelines on how to get the next-generation, business-backed NFR sourcing structure just right.

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