There is a lesson here for suppliers. There is little point attempting to build mutually beneficial win/win relationships if a particular retailer is still mired in confrontation.  You can not befriend a genuine Arctic wolf! 

There are still plenty of retailers who operate untamed wolf packs. Even Clifford was happy to acknowledge that sometimes Dixon buyers adopt a lupine approach:

"Are we tactical? Yes. Are we aggressive? Yes. Are we disruptive? Occasionally. But our buying team understands strategy and realises that they are only as good as their suppliers." 

Suppliers have to be aware of their importance to retailers. Clifford made it clear that of Dixons 250 main suppliers, the retailer only wants a very close relationship with 15 and to do joint planning with a further 40.  For the remaining 200 it is about raising efficiency and logistic standards. 

Closer relationships start to pay
At the conference, suppliers also revealed that they were starting to see major benefits from working more closely with retailers.  James Radford, vice president, global accounts at Hewlett-Packard and Peter Nolan, senior vice president, Electrolux can both point to relationships which have become far more profitable after being re-engineered.

Logistics and supply chain coordination remains an area where there is huge potential. Partly because this is an area where suppliers and retailers can lose huge amounts of money! 

Failing to accurately estimate demand for a particular appliance left a major retailer and its supplier shipping crates in from the Far East on two 747s for several months.  Sales were enormous, but neither party made any money.

At another level, the idea of measuring the profitability of different retail accounts is beginning to percolate into account management practice.  Measuring retail account profitability is a relatively new concept for many large companies.

"The impact on account managers can be electric, but there is a lot of resistance at first."

Indeed, Philips, Electrolux and Hewlett-Packard have all only been measuring account profitability in a detailed way in the last three years.

Rik Esselink, director, business innovation, at Philips says: "It has changed the way we look at accounts.  We were surprised at how often our assumptions proved to be wrong.  For example, in the Netherlands, we assumed that a retailer with 30 branches and 30 weekly deliveries would be less profitable than one with a similar number of branches, but with deliveries to just two warehouses. In practice, we found the demands made by the latter meant that it was much more expensive to run than the former."