Consumers care about the environment and safety; not so much about your profitability.

November 24th, 2008

Customer satisfaction may be as important as company net profitability. That is if you want to continue to grow the later and maintain your customer base.

Customer satisfaction may be as important as company net profitability. That is if you want to continue to grow the later and maintain your customer base.

If your customers are satisfied they will continue to shop in your stores. As a result, you can continue to grow wallet share for that customer base. Depending on each deciles percentage of sales and margin contribution it is safe to assume that loss of a single customer in your top deciles to competition or dissatisfaction can have a huge impact on the bottom line of retailers in an industry that lives in a one percent net profit world. Customers today care about environmental sustainability and if the perception is that your company does not consider this in their sourcing practices, that customer may well decide to shop somewhere else.

So, what does all this have to do with e-procurement? Actually, quite a bit. I was reading one of my favorite blogs on sourcing at Sourcing Innovation titled A Field Guide to Green Sourcing II. The author (the doctor) reviews Deloitte’s Six Step Strategic Green Sourcing Process. Although the entire process deserves review and a nice job is done by the doctor to that end. Of particular interest to this author is step number three listed below?

#3 Supply Market Assessment: In addition to the identification of potential sources of supply, an intense effort is made to identify and assess vendors who specialize in sustainable products and services. Don’t overlook the smaller, nimble, vendors, as they are often innovation leaders on the forefront who can offer insights into the latest technologies, methods, and processes above and beyond what your large, legacy, manufacturers may be able to provide

This author has been an advocate of exactly this point , and has discussed the same in a number of blog posts over the last six months. Here’s an early one from May. The issue is that although this may be a goal of your company; how will your company monitor these potential new sources of supply for compliance? I would advocate that there is a need for a supplier database that contains as many possible new sources of supply as possible and that those suppliers be held accountable to sustainable standards as a by product of inclusion in the database. The largest and to this authors knowledge only database available to retailers today that accomplishes this objective in it’s entirety is the SafeSourceIt™ North American supplier database comprised of over 250,000 North American retail suppliers.

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