The procurement process at the store is a finely tuned machine, where the most important factors are long-term cooperation agreements and mutual trust between the parties. The pandemic and the war in Europe have permanently and significantly altered procurement processes. A sudden change has ultimately become the new normal.

Behind the store's core selection and the seasonal variations are a complex and global supply chain, where purchasing decisions are made a year in advance.

Intersport is an international sports equipment retailer operating in 42 countries. Globally, there are over 5,000 stores. In Finland, in addition to the online store, there are over 50 independently operating Intersport stores.

In procurement decisions, global trends are considered, but national choices also carry weight. Moreover, the operations of brick-and-mortar stores and the online store support each other, as the entire offering is visible online.

Crasman is a strategic partner of Intersport's online business. We have implemented the online stores as well as product information and selection management. Crasman has delved into Intersport's business processes. It has developed and adapted them, as ready-made systems have not directly responded to the complex business demands. 

Choose your procurement partner carefully

Intersport is the world's largest international sports retail chain. Expectations for the selection and its development have grown seasonally. The international Intersport, or IIC, creates a good foundation by negotiating ready agreements with major so-called mega brands. This provides a strong foundation and negotiation leverage at the local level too.

The right partners, such as suppliers and brands, naturally become strategic partners over time. Good, credible, loyal, and reliable partners are also retained.

Ilkka Hairo is the product group manager for Intersport's selections, responsible for all categories. He states that a good procurement partner operates according to today's values, rules, and responsibility requirements, but that alone is not enough.

– In addition, it must serve all our 50 independent stores, which make their own decisions about the planned chain selections. Therefore, there must also be a willingness to serve.

Procurement processes aim far – partially in the dark

A critical review of the brand strategy is always part of preparing for a new season. 

– It is extremely important to go through brand metrics and analyse their efficacy in retailer cooperation and potentially change their weighting in selections. With the growth of the online store, we have also brought new brands into the selections. 

Behind the scenes, plans are running that track the achievement of set goals. Procurement binoculars are tuned for more than a year ahead, and figures for the ongoing season are not yet available. Trust and previous collaboration experiences are therefore crucial.

– We do not see numbers from the upcoming season. Therefore, there is a need to believe in the brand and trust how it has performed in the longer term.

Brands present their plans for the current season, which are reflected against our own plans. Many details are essential.

– We consider, for example, the underlying basic selection, brand image, and price-driven marketing. Teams create packages from the categories, which are then campaigned in marketing frameworks. After this, the packages become so-called front pages or offers for ordering for retailers, says Hairo.

The pace is brisk, and by midsummer, orders for the next spring are completed. Meanwhile, procurement for the upcoming season is already underway. At the same time, the timeline for brands stretches even two years ahead.

Digital selection management speeds up and streamlines work

Ilkka Hairo says that although various digital systems are used for process flow and monitoring, orders have so far been managed laboriously between retailers using Excel.

– A transition to digital selection management is currently underway, aiming to streamline and speed up orders, reduce errors, and significantly save working hours. 

– This helps us eliminate paper as orders move via digital channels to the retailers and back to us.

The sudden change brought about by the pandemic and war created a new normal

The watershed in procurement processes began in 2020. The pandemic changed practices everywhere, shutting down factories and entire countries. People's movement and habits changed as well. Obtaining materials became difficult. 

Hairo notes that the overall effects are immense.

– Factory closures in China due to lockdowns meant that productions are prioritised. Focus is on more profitable products, and the production of goods with higher production costs is halted. 

The invasion of Ukraine by Russia altered freight and logistics routes. Sanctions also impact the operations of the global supply chain.

– Air freight must now bypass Russia, and rail traffic through the country has ceased. In addition to a container shortage, European ports are congested.

In practice, the situation is visible in order cancellations, delays, and changes. When orders are made a year in advance, the impacts are felt for a long time. 

The work requires balancing between an appealing product range and a moderate inventory value. Ilkka Hairo notes that a sudden change has become the new normal, and adjustments have already been made. 

Successful operations require effective collaboration, reliable partners, and good systems. It is crucial to know the exact stages and locations of products, and orders must be adaptable if necessary.

– If we did not have good partners, they would push goods on us with a 'take it or leave it' mindset. But we have good cooperation; the system works, and we can adjust operations according to the situation.

Critical points in the procurement chain

Hairo lists comprehensive category management and communication as the critical points in the procurement chain. 

It is important to find collections that meet store needs and are supported by marketing.

– In our brand strategy, we have considered the roles of different brands in various categories and how the selection of individual brands is weighted in the overall assortment. Implementing this in stores is also crucial.

Price increases are also visible in the procurement chain. However, prices are not taken for granted, and negotiations occur over the prices set by brands. 

– With rising prices and declining consumer purchasing power, we have introduced new price points in our product offerings across different groups.

The online store supports the physical storefront

Hairo states that for Intersport, the visibility of the online store provides consumers with an important overview of offerings. 

All actions and items for sale are visible online. It's up to the stores to decide if they want to stock the product on the shelf.

In a retailer-led business, it's essential that the online store supports the physical storefront and provides broader service options for the consumer.

– Availability information is also visible online for individual stores, and purchased products can be picked up from brick-and-mortar stores. This adds important value and is therefore crucial.

This blog post is part of the Crasman Insight review, where we delve deeper into online store processes from selection management to storage and transportation.

Crasman Insight is a biannual publication exploring phenomena, trends, and insightful figures in e-commerce.

Crasman is an expert in digital commerce, familiar with all aspects of e-commerce. We assist you in developing your online business and demonstrate success with data. 

{{cta('5da54e68-0866-4977-badb-9170077e3238')}}