Daily Newsletter

14 September 2023

Daily Newsletter

14 September 2023

Better Buying drafts four standards to tackle harmful purchasing practices

A new scoring system assessment by the Better Buying Institute reveals a significant positive correlation in commercial compliance among global brands and retailers.

Isatou Ndure

BBI has unveiled its first annual report, the “Better Buying Commercial Compliance TrackerTM,” as part of its participation in The Sustainable Terms of Trade Initiative.

The Better Buying Commercial Compliance TrackerTM provides insights into the adherence of global brands and retailers to minimum performance standards outlined in key recommendations presented by manufacturers as fundamental elements in the terms of trade they seek in their business partnerships, with a primary aim to prevent avoidable harm caused by purchasing practices.

Among the key findings, the report highlights four specific practices where compliance is notably interconnected with compliance in other essential areas.

Brands and retailers seeking to enhance their purchasing practices are encouraged to concentrate their efforts on these aspects, including:

  1. Payment in Full
  2. Allowing adjustments to prices paid to suppliers when external costs fluctuate.
  3. Committing to prices that cover all costs associated with compliant production, enabling suppliers to earn a reasonable profit.
  4. Confirming production capacity in advance.

The survey featured within the report encompasses 11 specific questions designed to gauge adherence to recommended practices and expected performance standards.

It used a net promoter-type scoring system to calculate a composite score that reflects the percentage of ratings indicating buyers’ compliance “all of the time,” as opposed to “never,” “rarely,” or “sometimes.”

It shared that possible commercial compliance scores range from -100 to +100, with this year’s score standing at +29.4.

Dr Marsha Dickson, president and co-founder of BBI, said: “The patterns of behaviour we observed, with most practices either being compliant or not, enables suppliers to better identify, and avoid if their business allows, buyers who will strain their businesses and add to the pressures on workers in global supply chains.”

Moreover, the report underlines the correlation between several pricing-related practices and the potential resolution of the critical issue of paying living wages. Brands dedicated to this objective are encouraged to prioritise these areas in their collaboration with suppliers.

Dickson emphasised: “These and other measures are high-impact areas for the industry to focus on, and Better BuyingTM stands ready to help brands and retailers begin measuring their commercial compliance so they can identify and mitigate areas where they are deficient.”

In 2021, Better Buying introduced a snapshot assessment to bridge the gap between annual ratings cycles, for year-round monitoring of emerging issues and trends in the apparel industry.

Traditional AI is here to stay in the retail and apparel space

Initially, retailers used AI for basic tasks, including inventory management and demand forecasting. However, its usage has now become more prevalent in other aspects such as personalized marketing, customer service, pricing optimization, and supply chain management. With the rise of ecommerce and the increasing importance of data-driven decision-making, AI adoption in retail and apparel has accelerated. The industry now relies on AI to enhance the shopping experience, optimize business operations, and gain an overall competitive edge.

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