Why Digital Contracts Are a Must-Have for Retailers During a Trade War

Geopolitical instability is normal for retailers. Every week seems to bring a new chapter in the trade war or another isolationist policy that impacts the retail supply chain. To counter this instability, retailers are taking a variety of approaches:

  • Sourcing: find a supplier that offers the same products in countries not impacted by the trade war or consider a substitute produced locally.
  • Negotiation: negotiate price reductions with suppliers to minimize the impact of cost increases.
  • Real estate: relocate production to another country, which is possible but is a significant long-term change.
  • Pricing: raise prices, which is always a last resort, since it makes a company less competitive and punishes consumers.

 Large retailers like Walmart have been able to navigate instability—and minimize negative side effects like price increases—by employing a combination of tactics. Many smaller retailers have fewer options, generating a great deal of uncertainty. All retailers are looking for other viable options.

Digital contracts give retailers the agility to navigate an unstable supply chain

Today’s retailers must be agile, no matter their size nor the supply chain and operational strategies employed. They need to be able to respond in real time to the changing global supply chain and political environment. One tool that augments each of the approaches above is digital contracts, which can make the difference between which retailers thrive and which struggle to survive.

Contracts can either play a big role in addressing instability or be a big barrier to executing quickly. Regardless of which approach a retailer takes to manage the impact of a trade war, digital contracts are a critical tool to help operate more efficiently and effectively, providing the agility to respond to changes as they happen.

Here are a few critical ways digital contracts help retailers get ahead:

  • Onboard vendors faster: The ability to generate, execute and act on contracts in days instead of weeks or months is a big competitive advantage.
  • Update master service agreements (MSAs) in no time: Negotiating MSAs can be difficult with redlines going back and forth. Digital contracts significantly speed up this process.
  • Feel confident in big changes: Moving a factory or making major changes to the supply chain involves a lot of people and complex contracts. Using digital workflows and routing automates much of the paperwork involved, so every detail is visible to legal, operations, finance, sourcing and other departments to get work done more quickly.
  • Eliminate errors: The ability to require fields ensures busy executives don’t forget to provide required information. It also eliminates the need to go through contracts multiple times because of errors, incomplete information or change requests.

 As you develop your supply chain strategy in today’s ever-changing geopolitical climate, digital contracts are a must-have tool that is easy for companies of all sizes to implement.

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For more information, check out the following resources:

 Also make sure to check back next week for my last blog in the series on the Top 6 benefits of digital contracting for retailers