New research paints a dysfunctional picture of the relationship between suppliers and FMCG buyers during the product ranging process in the Australian retail industry.
The study into category buying was conducted by RangeMe, an online service launched in March 2014 connecting buyers and suppliers, and found that 76 per cent of FMCG buyers missed out on new product launches when suppliers failed to present the products directly to them.
RangeMe surveyed buyers from over 30 retail leaders including Harvey Norman, BIG W, Kmart, 7-Eleven, IGA, Chemmart and Priceline and found that 97 per cent received incomplete information from suppliers to make a ranging decision and 96 per cent received proposals outside of their pre-defined category review times.
Conducted in January 2014, the survey also found that 88 per cent of buyers received proposals outside of their buying categories and 72 per cent received proposals for products that did not comply with Australian standards.
Nicky Jackson, RangeMe Founder and CEO said, “Anecdotally, we knew that there was a problem in the way that buyers received proposals from suppliers of consumer goods such as food, healthcare, cleaning and personal care items. However we did not realise that it was so significant and widespread.
“There is a divide between how FMCG buyers and suppliers operate and it is clear that they are not in sync with each other. This results in lost time and missed product opportunities,” she said.
Jackson, a former marketing executive with Kellogg’s, learnt first-hand how difficult it can be as a supplier finding buyers. In early 2013 she embarked on developing a range of baby skincare products, a project she later abandoned, not wanting to get caught out with excess product and no buyers.
From that experience RangeMe was born, a website that streamlines the ranging process for products. Suppliers upload their products and information, and according to preferences, category buyers and suppliers are matched up so they can negotiate.
Jackson said it’s very difficult for suppliers to get their foot in the door with a buyer and a lot of suppliers probably just don’t have the knowledge of what the buyer wants or needs.
“Suppliers might have fantastic ideas and products but commercially there is a bit of a disconnect,” she said. “RangeMe has been developed in conjunction with buyers to get the pitch right the first time. That is why it is very useful because a buyer gets to see the right information every time.”
Since its launch in March 2014 more than 100 suppliers have signed up to the service and buyers include IGA, Toys R Us and City Convenience Store.
Jackson said the business is building up a mass of suppliers and buyers in grocery, pharmacy and baby and early childhood products but could be expanded into other areas if there is enough interest from relevant suppliers and buyers.