Thursday 9 January 2014

Showrooming your way to strategic success...

By Steven Low

Wikipedia define the process of 'showrooming' as visiting a normal brick and mortar store with the distinct objective of finding out how a product looks or feels in reality before going online to find it cheaper. This relatively new phenomenon is currently getting a lot of press as high street stores struggle to compete against the low overheads of an online store.

That got me thinking about a whole new approach to sourcing. What happens if you could do the same in a strategic procurement environment? Well, you can relax, we have been doing it for years! Suppliers are only too keen to showcase their products and services to you so there is no end to the opportunities they will give you to see their stuff in real life. They have their references lined up so that it’s not only them telling how good they really are.. this is kind of like a really old-school version of Amazon ratings. They do their best to show the really good ones and bury the bad ones as fast as they can.

So the ‘showroom’ aspect is covered, the ‘online’ ratings are kind of covered, now onto the purchasing of the product at the best rate. Clearly, I’m expecting you to have covered off the quality angle at this point. As with all purchasing, you have to know it’s the right quality for your needs. No point in buying the cheapest if you know that you will need to buy it again well before the other rejected products come to the end of their life. On a personal note, eBay may be full of wonder but it’s also full of false economic miracles. I know having bought most of the ‘alternative’ brands out there that arrive from far-off lands lasting a week and making me wish I had spent that extra £10.

Now, getting the best price in a strategic sourcing space is certainly not a case of browsing Amazon, eBay and various price comparison sites. However, having had all those suppliers in to ‘showroom’ their products, you can now invite them to tender and then onto Auction. Now you have completely turned the tables. The suppliers are now in direct and relatively open (compared to being one-on-one in a room with a buyer) competition with each other to win the deal. Depending on auction set up and rules, you may choose a fairly aggressive stance to ensure a response from the supply base in lowering their price. So that’s your price comparison and ‘internet’ purchase bit ticked off as well.

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