Adare International Insight Report – Top Marketing Procurement Trends for 2018

Top Marketing Procurement Trends for 2018The past couple of years have witnessed a number of tumultuous changes, with political events such as Brexit and the US election having a profound impact on marketing procurement. The demand for agility and flexibility has never been greater, and comes at a time when more businesses are realising the benefits of focusing on long-term value, rather than short-term savings.

Digital technology is reshaping every inch of our economy and is innovating the sector. Tools are harmonising procurement and marketing functions, and driving a greater need for transparency throughout the supply chain.

As we find ourselves approaching the end of 2017, let’s cast our attention to next year to predict what the future holds for marketing procurement.

While there will be a plethora of factors contributing to its transformation, we foresee three dominating trends spearheading the change:

• Continued digitisation of the supply chain• Corporate social responsibility (CSR)• Collaboration

Continued digitisation of the supply chainIn PwC’s 2016 “Industry 4.0: Building the digital enterprise” report1, a third of over 2,000 professionals said that their company had made steps to digitise the supply chain, with 72% predicting that it will happen over the next five years.

Best-in-class organisations view digital as a positive disrupter that transforms the supply chain from a set of siloed functions into a cohesive, fully-integrated and transparent ecosystem. PwC notes that the aim of the digital supply chain is to “deliver the right product into the customer’s hands as quickly as possible – but also to do so responsively and reliably, while increasing efficiency and cutting costs through automation”.2 And according to irms360, digitally integrated brands outperform their non-integrated counterparts by 20%.3

References: 1. https://www.pwc.com/gx/en/industries/industry-4.0.html?_ga=2.61558124.1523821062.1507019240-1511007385.15015870332. https://www.strategyand.pwc.com/media/file/Industry4.0.pdf3. http://www.irms360.com/blog_post/top_10_supply_chain_and_warehousing_trends_2017

Over 2,000 professionals said that their company had made steps to digitise the supply chain, with 72% predicting that it

will happen over the next five years.

Barry McPhillips, Multichannel Solutions Director of The Purple Agency in Adare says

“The ‘digitisation of everything’ is not only allowing end users/consumers to remove friction from outdated traditional processes like booking hotels, purchasing goods and tracking their health levels, but it’s also providing brands and organisations with data and intelligence that can transform business performance.

The future is all about mastering these new levels of intelligence and applying them to business benefit.

For example, it’s not just about monitoring and measuring one or two things – it’s about developing insight across many areas such as Interaction analytics, People analytics, Device analytics and Location analytics. Yes, this does feel like big brother, but the reality is brands need to know who looked, who touched, who purchased, via what device and in which location.

Digitalisation helps to prove more context and more meaningful content around consumer engagement.

This depth of information helps brands and organisations to help redesign and improve customer experiences, and this data can ‘inform and affect’ better performance across all areas of an organisation.

Our digital solutions with Merlin Entertainments are helping the business to know more about how guests behave, and this information is ultimately helping guests to have a better day out by getting on more rides, avoiding queues and accessing time and cost saving promotions in real time.”

Digitisation is not only enhancing transparency within the supply chain, but also communication, flexibility and responsiveness. On a more granular level, some of the technologies contributing to supply chain automation include:

Big data The buzz surrounding big data will continue to grow during 2018 and beyond. Analytics tools play a key role in improving sourcing, collaboration and planning processes, as well as managing supplier risk. For marketing procurement, big data can be utilised for processes such as spend analysis, enabling more accurate calculations of ROI. But garnering data for data’s sake is useless – businesses need processes in place to help them turn data into actionable insights.

Cloud technology and IoTCloud technology will continue to transform procurement processes and more specifically supply chain management (SCM) and logistics operations. Cloud-based platforms, together with the Internet of Things (IoT), remove physical boundaries and in turn create a centralised system, leading to faster, more informed insight and enhanced efficiency.

As we move into 2018, we see software as a service (SaaS) applications continue to grow in popularity to become embedded into procurement practices. These apps allow businesses to do everything from source service providers to track marketing spend and monitor compliance. They are highly accessible, as data can be retrieved anywhere and from any device; and they are simple to manage, because software is updated centrally and in real time, ensuring everyone has the most up-to-date information.

The future is all about mastering these new levels of intelligence

and applying it to business benefit.

References: 4. https://www.unilever.com/news/Press-releases/2017/report-shows-a-third-of-consumers-prefer-sustainable-brands.html5. https://www.nielsen.com/content/dam/nielsenglobal/dk/docs/global-sustainability-report-oct-2015.pdf6. https://www.cips.org/en-gb/news/news/one-in-three-businesses-are-flouting-modern-slavery-legislation--and-getting-away-with-it/7. http://www2.ecovadis.com/Global-CSR-Risk-and-Performance-Index-2017?utm_source=Press+Release&utm_medium=PR&utm_campaign=EV+Index+Report

Corporate social responsibility (CSR)Sustainability is the word on everyone’s lips, no more so than consumers’, with a Unilever study4 finding that one third now choose to buy from brands they believe are doing environmental or social good. Moreover, in a report5 from Nielsen, 66% of respondents said they are willing to pay more for sustainable brands.

Marketing procurement obviously has a key role to play in a brand’s CSR credentials; after all, it is largely responsible for brand image. So, for instance, when a business wants to source promotional merchandise, it’s key that social, economic and environmental factors are considered alongside price and quality when selecting suppliers.

A damning report6 from the Chartered Institute of Procurement & Supply (CIPS) suggests that more needs to be done in terms of compliance. It states that one in three UK businesses covered by the Modern Slavery Act are flouting requirements; yet, there are currently no punitive consequences for non-compliance.

With cases of modern slavery, fraud and wider concerns such as child labour coming to light, this will only push consumers into demanding greater transparency as we move into 2018. Marketing professionals will need to work closely with vendors to ensure that ethical practices span the entirety of the supply chain, and identify how to communicate that to consumers.

As testament to our commitment to corporate social responsibility as a global marketing procurement provider, Adare was awarded Gold supplier status from EcoVadis, a pioneering platform that determines sustainability ratings. This places us in the top 5% of organisations evaluated and helps to instil confidence in our clients that ethical sourcing is something we take very seriously.

EcoVadis’ first annual Global CSR Risk & Performance Index7 rated over 20,400 firms on a scale of 0–100 (100 representing exceptional CSR coverage). It found that small and medium-sized firms, which comprise around 80% of the total number of firms, were improving their CSR scores at a faster rate (14.9%) than their larger peers (12.3%).

Commenting on the results, the report notes: “[Recent] initiatives focused on CSR issues (e.g. modern slavery, conflict minerals, environmental pollution) in the value chain are paying off, and we can expect greater dividends in the future as long as initiatives continue their efforts.”

Steve Cumley, Adare’s Head of Retail Innovations, sees the growing importance of a credible and compliant CSR strategy:

“Working with global clients and suppliers on such a wide range of marketing collateral in multiple markets, CSR has really become a central pillar of our service offering. We actively work with our supply chain to ensure the highest sustainable standards are adhered to on a consistent basis. We also implement regular checks to our global supply chain to ensure that good business sustainability is a daily and standard practice in all key areas.”

“For ourselves, Adare submits to EcoVadis’ rigorous annual CSR audit, which gives independent verification of our compliance endeavours. The audit covers the four key areas of sustainable procurement, environment, labour practices & human rights and fair business practices. This programme ensures that we, and our suppliers, maintain the highest possible environmental and ethical standards.

We’re proud to hold EcoVadis’ Gold certification which puts us in the top 2% of 30,000+ companies which are audited globally each year. Of course, we share the audit data and results with our clients, giving fully transparency of our performance.”

When a business wants to source promotional merchandise, it’s key that social, economic and environmental

factors are considered

If you are looking to outsource your marketing procurement activities, why not collaborate with Adare? Our Global Vendor Management teams work incredibly hard with our suppliers across all markets to ensure

that service and product quality surpasses the levels our clients expect.

Get in touch today by email at hello@adareinternational.com or visit our website adareinternational.net to find out more.

Collaboration The integration of technology within the supply chain, coupled with a greater need for transparency, is forming a more collaborative procurement environment. This trend has been gaining traction for several years now; in 2015, The Future of Procurement report8 from Oxford Economics revealed that 68% of procurement executives and 70% of practitioners believe procurement at their company is becoming more collaborative with other parts of the business.

Initially, there was a fear that technology would depersonalise relationships, but, on the contrary, teams which harness fully integrated platforms find that collaboration has improved. E-procurement systems allow marketing procurement professionals and suppliers to share and manage valuable data online. Thus, streamlining the entire procurement process.

Enhanced relationships between marketing service suppliers and brands, and procurement teams and other parts of the business, will aid agility in the procurement process. An agile marketing supply chain will fare better at responding quickly to shifting consumer demands and cut lead times, ultimately helping businesses remain competitive in their sector.

This emphasis on collaboration proves that marketing procurement is much more than an initiative aimed at cutting costs. It is increasingly becoming a competitive and strategic resource, and a crucial driver of business value.

Mark McDonnell, Adare’s Global MD, has witnessed the benefits of collaboration:

“We have found the most successful way to engage effectively with clients is to take a truly collaborative approach. By working as a team we become more than the sum of our parts, and clients see demonstrable benefits from taking this approach. With innovative clients such as Coca-Cola who are willing to embrace new thinking, we’ve found the added value can extend beyond the simple sharing of ideas and experiences, into tangible initiatives such as product standardisation and spend consolidation.”

“Working together we’ve created customised technology solutions which align ideas, knowledge, expertise and spend across multiple markets, and this has really started to deliver some serious benefits in the shape of data-driven savings and increased value for our clients.”

References: 8. http://www.oxfordeconomics.com/futureofprocurement/reports

68% of procurement executives and 70% of practitioners believe procurement at their company is becoming more collaborative with other parts of the business