In yesterdays post of the same title we discussed many reason why using these tools can help to make your company more competitive and profitable at the same time. What we left out is that the might also keep your company in business.
A number of years ago as a young sales person I traveled to a regional retailers store to demonstrate the newest scanner/scale technology. Yes, believe it or not there was a time when scanners and scales were not an integrated product. I had practiced my demo for days and planned on using labor reduction, customer throughput and error elimination as part of my ROI discussion. When I arrived at the store and met the manager I asked him to find some produce that I could demo. What was curious to me was that there were no customers in the store and I mean none. The manager explained that Wal-Mart had opened a Hyper Mart down the street. These were much bigger than today’s Super Centers. All the productivity in the world could not help this retailer as the competition offered greater selection and better pricing. Throughput, error reduction etc. did not matter because customer traffic was down substantially. This retailer is no longer business today.
I am not against Wal-Mart or any other quality retailer like them that wants to compete for new business. Tesco from the UK actually came to the U.S. with their small Fresh N Easy format a couple of years ago. What should concern retailers, acualty smaller ones is that Wal-Mart now plans to open small urban stores that are predominantly focused on groceries. Because of whom they are and how they buy. small retailers and I mean regional and small chains will not be able to compete, will loose business and unfortunately some may fail.
E-procurement tools just might be what allows your company to compete and exist. It will take quite a while for Wal-Mart to test and roll out this model, so now may be a good time to prepare by improving your bottom line and creating your own war chest.
As an example, SafeSourcing does a lot of work with regional and small drug store chains. These chains have seen average savings of 24.7% during the last year using our tools. That’s not bad for an industry with a 1.5% bottom line.
Give us a call; if you don’t save you don’t pay.
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