Retail in Asia

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Enhancing quality assurance, ethical sourcing key priorities for retailers in private label sourcing, says survey

Enhancing quality assurance and ethical sourcing are key priorities for retailers in private label sourcing, a new survey says.

Deloitte’s 2015-2016 Private Label sourcing survey polled 388 respondents from Apparel, General Merchandise, and Grocery retailers to uncover leading Private Label sourcing practices. Its findings highlight shifts in market trends. Key findings include:

1. More than cost: Retailers reported they are focusing efforts on product quality, speed to market and mitigating risk to satisfy consumers, with the majority ranking quality assurance programs as the top strategic response for the second year running.

2. Fewer, deeper manufacturer relationships: With 3 in 4 retailers already or planning to consolidate vendors, the industry is placing bigger bets on fewer manufacturers, causing potential ripple effects that could upset the current sourcing landscape.

3. Mixed success on reshoring: Reshoring production to domestic vendors was retailers’ top emerging response to market pressures with nearly one third planning to reshore in the future. However, across categories, only 50-70 percent of those attempting to reshore have succeeded.

4. Movement in the source of supply: The survey captures retailers’ historical and projected sourcing footprints.

5. The evolving sourcing organization: Retailers are making significant investments in advanced technology to manage private label sourcing, in addition to evolving the operating model, governance, and tax strategies.

To download the full report, click here.