Web-Based Solutions Help Retailers Streamline Private Label Supplier Communications

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November 9, 2010

As a growing proportion of inventory is comprised of store brands, retailers find themselves relying on various forms of technology to more efficiently manage their private label programs and communicate with a global supply chain.

"The real challenge is getting products to market," Paula Rosenblum, managing partner of Retail Systems Research LLC (RSS) told Internet Retailer. "The pace of change is stunning in a variety of categories from fashion to computers and electronics. That means that if you're sourcing from far away you have to be able to be responsive."

More than 55 percent of retailers polled by RSS Indicate that at least half of the merchandise they currently sell is private label, up 13 points from 2008, a growth trend that is expected to continue. According to Deloitte LLP, 90 percent of retail executives they surveyed expect private label market share gains through 2012.

To stay on top of this growth and market demand, retailers are challenged to ensure that the factories manufacturing their store brands have the “right mix of materials at the right time so that goods arrive in time for seasonal rollouts and promotions,” the Internet Retailer reported. So that retailers can better manage the manufacturing and supply chain process, many supplier are implementing web-based product lifecycle management systems

These systems help retailers manage all the moving parts such as working with a variety of vendors and overseeing the procurement of raw materials, development and pre-production processes, manufacturing, post-production and shipping, Rosenblum said.

Product lifecycle management tools “provide a single gateway where a retailer can inspect each step of the production process,” she said, which can reduce costly errors. Quality breaches often occur when retailers combine too many different software solutions to monitor production of their private label products.

Thirty-six percent of retailers with more than $1 billion in annual revenue use at least three separate applications to design, source, track and verify their inbound private-label merchandise, according to RSR.
Furthermore, 16 percent of large retailers rely solely on spreadsheets rather than use commercial applications, according to Rosenblum.

A winning feature of web-based systems is their standardization of measurements, colors and other data points across languages, which helps retailers avoid errors and get products to distribution centers and stores on time, experts told Internet Retailer.

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