In 2005, we conducted our first retail Vendor Summit while leading the Business Partnerships and Negotiations Team at Target. We firmly believed sharing our merchandising vision, strategy, and plans would lead to better alignment with our most important vendor partners, and facilitate mutual investment to drive market share, sales, and profitability. The results of that first Summit produced years of out-sized returns, innovation, and new partnerships that continue to this day for Target, twenty years later.
In 2015, we created Conlego to focus on uncovering the hidden value in the retail ecosystem through unique negotiations, partnership-building, and category management. A decade later, the Vendor Summit model as a tool for expanding value and growing impact continues to drive results.
We have implemented the Vendor Summit model at several major retailers with extraordinary results including:
- More alignment
- More investment by vendors happy to do so
- Increased sales, profitability and market share for all
For retailers with a growth strategy and plan, the Vendor Summit may be one of the most powerful tools for boosting investment and accelerating momentum.
What is a Vendor Summit
A gathering of important vendors that have a significant stake in the success of the retailer and are likely to further invest if provided with the
right information and incentives. During the summit, the retailer lays out their vision, strategy, and plan for growth. Then asks for investment in the plan. It can be focused on the retailer as a whole, or a specific part of the business, such as owned brands/private label, drug and beauty, or grocery, for example.
The Summit begins with a general session hosted by the most senior leaders of the retailer (often the CEO). These leaders share the corporate, merchandising, marketing, supply chain, and digital strategies, and plans in some detail to show vendors there is meat behind the vision and there are plans to make it work. The general session is immediately followed up with individual vendor meetings to align on investment levels and go-forward plans. These are often the beginning of Joint Business Plans with vendors. It is important to jump on the momentum of the general
session to secure investments immediately.
Keys to a Successful Summit
- Preparation: As in any engagement with a counterpart, thorough preparation is required. Not only must an inspiring story be created but work is required to prepare for specific asks to specific vendors. Understanding the interests at play for each vendor is a crucial component of preparation to achieve the most value and impact. By speaking to each vendor’s interests, there is a greater likelihood of buy-in and investment.
- Leadership participation: Top leadership must present the story, strategy, and plan for vendors to see and understand there is buy-in to the plan from top to bottom.
- A Great Story: We know through years of experience that “Best Story Wins”. Vendors will overinvest when they believe the story. It is important to get the story right. This requires setting a compelling vision with a specific plan to achieve it. The story must also be told in a way that resonates with the vendors and addresses their key interests.
- A specific ask: There must be an ask of each vendor. Anchoring what it will take to participate, and win, points the vendor to the right level of investment.
- Timing and Speed: Vendor Summits should occur at a time when the vendors still have time to adjust their investment plans. Summer is an ideal time before budgeting occurs in the Fall for most. In addition, a due date should be communicated for making investments, to spur a sense of urgency and a fear of missing out.
Why the Vendor Summit Model Works so Effectively
- Taking Charge: In most instances, retailers allow their vendors to take the lead with their story and anchor with their position about what should be done at the retailer. This puts the vendor in the driver’s seat, putting the vendor in charge. The Summit allows retailers to take the lead and anchor with their story, strategy, and plan.
- More transparency: We know from experience that vendors crave more information about a retailer’s strategy and plans to justify more investment. Too often, retailers hold back this critical information but, in the process, lose resources and investments because vendors are unsure of direction and plans. Providing more information about what it will take to grow with a retailer opens new opportunities, innovation and ideas.
- Time Constraints: We know time constraints force vendors to make decisions and pony up. Delivering a deadline for new investments stemming from the Summit will drive a sense of urgency.
- Competition: The Summit provides a certain amount of “fear of missing out”, or competition, where they can see their competitors in the room and what their competitors may achieve for investing. This is a huge motivator to play now.
We continue to believe in the Vendor Summit as a powerful tool. Recently, we helped a grocer generate $26M for their private label expansion in two summit days. We helped another retailer launch a next-generation loyalty app with $16M from their vendors in one half-day summit.
The Vendor Summit is a unique and effective tool for driving more investment in a retailer’s growth. If done correctly, the impact will be huge.
