The Value of Transparency In Retail

Many companies in the retail industry are highly sensitive about information sharing.  These companies worry that competitors might gain an edge by accessing certain business information.  Consequently they prefer to keep their strategy, ideas, or data under wraps.  While it makes sense to avoid sharing information openly with competitors, retailers should share information liberally with partners and vendors.  Too many retailers maintain an overly private approach which prevents them from capitalizing on the valuable insights that others can offer.

Companies that keep tight control over their information feel secure because they limit the access to and dissemination of this information.  This might help management sleep at night, but there is a significant tradeoff involved in adopting an overly private mindset.  Sharing information (relevant sales reports, business strategy, etc.) with vendors and partners can create a dialogue that is mutually beneficial.  These third parties will appreciate your candor and desire to establish a fruitful relationship based on mutual trust.

Forward thinking retailers, such as Zappos, recognize this and capitalize on the depth of knowledge and expertise in their vendor base.  In Delivering Happiness, Fred Mossler, former SVP of Merchandising at Zappos (whose current position is "No Title"), explains how Zappos benefits from sharing information with vendors:
The average buyer at Zappos has a portfolio of fifty brands, but because of transparency, there's an additional fifty pairs of eyes helping run the business too.  Not only that, vendors are the experts at what they do.  No one buyer knows a brand better than the brand's own representative.  So why not leverage their knowledge to help us run a better business?  As a result, when they feel empowered to manage their own business using the tools and accessibility we provide, they'll spend more hours helping us than their typical account.  The success of our team can be attributed to our buyers and vendor partners, together.
It's difficult to make the point any stronger than Fred does, so I will leave it at that.

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