When we investigated the e-auction phenomenon early last summer we found own label suppliers were outraged at what they saw as the introduction of a blunt tool which was being used to hammer down their margins.
Whatever the benefits for retailers, it was clear that for some buyers the quest for best price at the click of a mouse had become more important than the drive for quality, reliability or innovation. And our research led us to question whether these auctions would damage long-term trading relationships.
So, what has changed since then? On the face of it, very little. The auctions continue to happen. Suppliers remain deeply suspicious about the whole process. And the majority of buyers are adamant that they now have an invaluable trading tool at their disposal one that is quicker to employ and more transparent than other procurement methods.
But as our research shows this week, when you dig beneath the surface some important things do appear to be changing.
For starters, suppliers are learning that they can say no' and just walk away from online auctions. More importantly and probably as a result of the action of these refuseniks you get a feeling retailers are more alert to the fact that their suppliers are not whingeing but raising genuine concerns about the whole process.
That doesn't mean retailers are going to back down on this. As one senior buyer told us, e-auctions are a "necessary evil" and one that will not disappear. His view is backed up by our poll of supermarket buyers, all of whom emphatically support the use of this online tool.
But if more people accept there is some truth in the argument that the cheapest price does not always generate the best value in the long term, we may yet avoid a meltdown among this country's supplier base.
As the own label suppliers survey elsewhere in this issue demonstrates, there are some fantastic companies out there doing some great things with their retail customers that build business for mutual benefit. It's just a shame that these sorts of relationships have sometimes been undermined by the clumsy use of e-auctions.
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Whatever the benefits for retailers, it was clear that for some buyers the quest for best price at the click of a mouse had become more important than the drive for quality, reliability or innovation. And our research led us to question whether these auctions would damage long-term trading relationships.
So, what has changed since then? On the face of it, very little. The auctions continue to happen. Suppliers remain deeply suspicious about the whole process. And the majority of buyers are adamant that they now have an invaluable trading tool at their disposal one that is quicker to employ and more transparent than other procurement methods.
But as our research shows this week, when you dig beneath the surface some important things do appear to be changing.
For starters, suppliers are learning that they can say no' and just walk away from online auctions. More importantly and probably as a result of the action of these refuseniks you get a feeling retailers are more alert to the fact that their suppliers are not whingeing but raising genuine concerns about the whole process.
That doesn't mean retailers are going to back down on this. As one senior buyer told us, e-auctions are a "necessary evil" and one that will not disappear. His view is backed up by our poll of supermarket buyers, all of whom emphatically support the use of this online tool.
But if more people accept there is some truth in the argument that the cheapest price does not always generate the best value in the long term, we may yet avoid a meltdown among this country's supplier base.
As the own label suppliers survey elsewhere in this issue demonstrates, there are some fantastic companies out there doing some great things with their retail customers that build business for mutual benefit. It's just a shame that these sorts of relationships have sometimes been undermined by the clumsy use of e-auctions.
{{COMMENT & LETTERS }}
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