Retail Industry Category Overview
The retail industry consists of firms engaged in vending commodities or goods for household or personal consumption – primarily comprising of clothing and accessories, food and beverages, technology, pharmaceuticals, specialty, and others. The major factors fuelling the growth and opportunities of the global retail market and the retail segment players include the increasing population, GDP growth, higher disposable income, and rising consumer spending. However, the global economic recession, higher unemployment, and inflation rates are some of the challenges for the market’s sluggish growth in this industry segment. As a result, many retail firms have started opting for spend analysis studies to improve process efficiency and cut down the costs.
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The Procurement Pain Point and Insights Offered
A global retail firm wanted to gain insights on the rising importance of global retail markets and assess and select the right suppliers. Additionally, the client required fundamental insights on its business spend to generate meaningful information on several important metrics. This included suppliers by spend, volume-based top suppliers, and regional spend distribution.
To cater to the specific category requirements of the client, the spend analysis professionals at SpendEdge carried out a comprehensive research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies. During the course this spend analysis study, the client was given a list of suppliers with different names but with the same parent corporation. The client was also recommended to carry out supplier normalization, which would help increase visibility into spend areas across the board and help in improving processes. Subsequently, achieving significant cost savings prospects and robust negotiation tools for the upcoming sourcing strategies.
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Key Questions Answered in this Spend Analysis Study Include
The spend analysis study helped the client utilize the data provided into meaningful business information from volume-based top suppliers, regional spend distribution to material class spend versus order lines, order type volume versus spend, and more. Additionally, the client was also able to efficiently identify and take actions about the inefficiencies in their procurement system. This enabled them to reduce maverick spends, recover over-payments, manage risk, and benchmark their relative position – for a projected total annual savings of $20 million.