E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
New products get a faster hearing, product managers become more productive, 7-Eleven saves money and customers have more choices when7-Eleven sends supplier wannabes to an online form to propose new products or supplier relationships.
It’s crucial but not easy to stand out with new products in the competitive convenience store business, where stores need to offer more than milk, bread and newspapers to build customer traffic and sales. “We always want to be introducing new products,” says Michael Baldwin, national manager of urban affairs at 7-Eleven Inc.
Like its trademarked Slurpee flavored ice drink, new and innovative products help to make 7-Eleven what it is: a c-store with all the basics but also with a bunch of products not likely to be found in the same assortment anywhere else. But stocking its 5,800 stores in line with that strategy has meant an endless process of reviewing proposals and application forms from dozens of suppliers each month.
Every week, 7-Eleven managers at Dallas headquarters sort through unsolicited proposals from as many as 35 vendors, whose bids arrive via fax, letters, phone calls and walk-ins. The whole process was difficult to organize and record, and it was impossible to know how many good prospects may have simply given up after failing to get through to a category manager, Baldwin says.
No more. Now that 7-Eleven is moving its suppliers to a web-based proposal process, its new-products review system lets vendors deliver their proposals immediately to the proper category manager while 7-Eleven avoids the chore of tracking dozens of paper forms and voice-mail messages, Baldwin reports. Under the new online system, he says, “we’ll save tons of operating dollars in paperwork, call center labor and other operations.”
The system, developed in-house and launched in mid February, was designed to save time in processing vendor applications while matching them to customer demand. It requires vendors to fill out an application form on 7-Eleven.com in the Products & Services section. Their information is transferred to and stored in 7-Eleven’s secure corporate intranet, where category managers in Dallas review the applications.
7-Eleven category managers learn of new application postings by e-mail alerts. Suppliers receive e-mailed updates of review status; they can also check application status online. The new system also helps to avoid lost communications, Baldwin says. “In the past, we never knew if a new supplier stopped trying to contact us if their call didn’t go through to a category manager,” he says. Managers now include in their voice mail messages instructions on how to apply online.
7-Eleven has realized additional benefits, Baldwin says. It makes it easier for suppliers to an individual 7-Eleven store, for example, to apply for business with a larger number of stores. And when category managers want to search for particular types of vendors, they can check a database of past orders.
The only way
”We’re getting many more proposals, so it increases the opportunities for us to review more vendors,” Baldwin says. “And while it increases opportunities for vendors to submit proposals to us, and for us to reply to them on a sufficient level, it creates a win for our customers because we have more to offer them.”
He adds that 7-Eleven is now making the online application the only way for vendors to offer new products and services. The process of getting vendors to use the web application has not been difficult, since vendors quickly see how easy it is to communicate directly with the right people, Baldwin says.
Baldwin says the system will eventually be used for not only suppliers of consumer goods, but for all products and services used by 7-Eleven`s corporate operations. “We’re moving fast in a multi-disciplinary process,” Baldwin says. “This technology allows us to capitalize on better vendor relationships.”