Retail merchants have always been at a disadvantage in negotiating with their suppliers. After all, for every category they are responsible for, merchants are required to evaluate thousands of SKUs, dozens of vendor proposals, changing market conditions, complex funding agreements, pricing strategies, and assortment decisions, often under impossible deadlines, and often with little assistance.
At the same time, suppliers arrive to category negotiations with teams of analysts who have spent weeks preparing. They have only one party to focus on – the retailer. This creates a large imbalance of power.
For the first time, artificial intelligence changes that equation. Not because AI negotiates.
Because AI allows merchants to prepare—and think—at an entirely different level.
The New Competitive Advantage Isn’t More Data
Retailers already possess enormous amounts of information. The challenge has been transforming that data into negotiating insight quickly enough to matter. AI changes this by acting as an analytical partner rather than simply another reporting tool.
Instead of spending hours assembling spreadsheets and comparing proposals, merchants can begin by asking questions.
- What changed from last year’s proposal?
- Which vendors present the greatest margin risk?
- Where has funding declined?
- Which assumptions should I challenge?
- What negotiation opportunities am I missing?
Within seconds, AI can surface answers that previously required many hours of manual work.
Preparation Is Where AI Delivers Its Greatest Value
The strongest negotiators have always asked better questions than everyone else. AI simply allows them to ask far more questions before the meeting ever begins. Imagine walking into a Category Line Review already knowing:
- Every significant change between proposal versions
- Which vendors reduced funding
- Which proposed items create margin pressure
- Which assumptions deserve validation
- Which commercially reasonable concessions are most likely to succeed
- The financial impact of every major negotiating decision
Instead of searching for information, merchants spend their time developing strategy. That is where negotiations are won.
Using the Right AI Platform is Crucial
Merchants will be tempted to simply put supplier proposals into one of the commercially available platforms like Co-Pilot, ChatGPT, or Claude. Unfortunately, these platforms are unlikely to provide the best or even correct insights for merchants.
Conlego recently conducted a study comparing the insights generated by these commercial platforms with the Portager.ai platform that was specifically developed for merchant negotiations. The differences in analyses, insights, and outcomes were stark.
The commercial platforms failed to appreciate the nuances of retail and the math required to evaluate vendor proposals. Their suggestions considered all forms of negotiation approaches, without understanding the special relationship retailers often have with suppliers they negotiate
with year after year. Retail negotiations are not a one-and-done deal.
In every case, comparing supplier proposals using Portager.ai versus those platforms commercially available, Portager produced better insights and an accurate evaluation of the financials. At several leading retailers using the Portager platform, they are seeing increased value-creation, more profit, and improved sales.
AI Finds. Merchants Decide.
This distinction is critical. AI should never determine:
- Which products belong in the assortment
- Which vendor wins the business
- The retailer’s pricing strategy
- Category strategy
- Customer relevance
- Long-term supplier relationships
Those decisions require judgment, understanding customers, strategic thinking, and experience. AI can identify that a product appears margin dilutive. Only an experienced merchant knows whether that product represents an important innovation, traffic
driver, or strategic investment.
The best organizations will never allow AI to replace merchant judgment. They will use AI to make merchant judgment dramatically better.
The Future Belongs to Merchants Who Combine Experience with AI
Retail negotiations have always been about creating better business outcomes—not simply negotiating harder. Artificial intelligence doesn’t change that mission. It changes the speed at which merchants can uncover opportunities.
AI reduces hours of manual analysis to minutes, identifies risks earlier, and surfaces negotiation opportunities that might otherwise remain hidden. It drafts communications, summarizes proposals, compares alternatives, and helps merchants prepare more thoroughly than ever before.
But the most successful retailers will remember one simple principle:
AI doesn’t negotiate. People negotiate.
The organizations that combine experienced merchants with purpose-built retail AI will consistently enter every Category Line Review better prepared, better informed, and better positioned to create value for both retailers and suppliers.
About The Authors
Daniel Duty is the founder and CEO of Conlego, a firm helping retailers and consumer brands negotiate more effectively through proven negotiation methodologies, executive coaching, and strategic partnership development.
Alex Kopplin is the creator of Portager, the industry’s first AI-supported negotiations and Joint Business Planning platform built specifically for merchants.
