Three Lessons Retailers Running Drop Ship Programs Can Learn From The Premier League

With the World Cup kicking off today in Russia, it is a good time for enterprise retailers to examine soccer’s most popular league – the English Premier League (EPL) – for lessons that can be applied to their drop ship programs. Since its formation in 1992, the EPL has been synonymous with the world’s best soccer. It broadcasts in 212 territories and 643 million homes and has a potential audience of 4.7 billion people. With soccer surging in global popularity, the EPL is well-positioned to enhance its reputation as being the most-watched sports league on the planet. What innovations can be uncovered from their success and applied to our industry?

1 – Team Promotion / Relegation

The EPL features an innovative approach to maintaining the competitive balance amongst its 20 clubs and maximizing fan interest, even for last place teams that usually become afterthoughts in other sports leagues. Its system “relegates” the three lowest placed teams to their less-competitive league and “promotes” the top minor league teams into the EPL on a yearly basis. Since 1992, 49 clubs have competed in the top EPL tier. This system keeps fans interested in their favorite clubs all season long and improves the on-field product by ensuring teams are not intentionally losing matches to improve their draft position.

Retailers running drop ship programs should view their supplier relationships through a similar lens. Top suppliers from the drop ship program that grow sales and complement a retailer’s core strategy should be promoted to wholesale distribution, strategic merchandising relationships, and store placement opportunities. Large and declining suppliers should be moved out of the warehouse and into the drop ship program to take advantage of the different economics. Small drop ship suppliers that are not meeting minimal success criteria should be removed from the website because they end up negatively impacting the customer experience.

Best-in-class retailers running drop ship programs take a data-driven approach to reviewing their supplier relationships. They move suppliers between fulfillment channels based on last year’s performance, collaborate with merchants on next year’s forecast, and evaluate supply chain constraints such as warehouse capacity. They also institute a formal, annual process to keep themselves disciplined about making these decisions. The promotion and relegation approach of the EPL’s system is an innovative model that retailers can use to optimize their supply chains.

2 – Player Tracking Data

Using data to gain an edge in business and sports is certainly not a new concept. EPL teams have adopted their own unique approach to collecting and using data to drive better performance. Since the 2015-2016 season, EPL players have been using wearable devices during matches that record every step they run, every turn they make, and how fast they accelerate. Data is processed and compared with previous matches to contribute to tactical in-game decisions, player workload assessment, and injury prevention strategies. For example, wearable technology enables doctors to assess whether a running player is pushing off equally from both feet over long periods of time or whether subtle body weaknesses might lead to injury and missing important EPL matches.

Retailers running drop ship programs should apply the concept of fitting wearable devices on players to their suppliers. Data related to product productivity, package delivery performance, supplier profitability, and customer reviews need to be collected, stored, and retrieved to help make better decisions for the program.

Best-in-class retailers running drop ship programs use scorecard systems to drive supplier performance. The best scorecards collect and synthesize financial, operational, and customer-centric data to quickly identify suppliers needing attention as well as those exceeding expectations. The EPL’s player tracking devices is a great analogy to support the real-time collection and usage of this data.

3 – Youth Academies

EPL clubs and supporters focus their attention on the week-by-week drama unfolding on the pitch, but management also keeps its eye on the future by developing the next generation of talent. Youth Academies often start developing talent and signing kids to contracts as young as 11 and 12 years old. These young amateurs practice on the same fields as the professionals and become indoctrinated into their club’s culture well before maturity.

Retailers running drop ship programs need to think about developing their supplier relationships as if they were budding soccer stars. It’s better to preliminarily invite a bunch of youthful brands and new suppliers into direct relationships prior to making significant investments in terms of time or capital. Drop ship is a great test lab because products and suppliers can be onboarded faster than traditional owned-inventory relationships. If a small test with a new supplier works, their entire assortment can be added or the supplier can be promoted to the larger organization. If the small test fails, merchants can head back to market and find new talent without significant risk being incurred.

Best-in-class retailers running drop ship programs develop dynamic onboarding pipelines that include many different supplier types. Their pipeline is designed to impact the current business, but it’s also intended to work with merchants and capitalize on potential trends and opportunities that might exist in the future. The EPL’s youth academy system is a great analogy for how retailers should think about suppliers and brands in terms of assortment expansion and supply chain partnerships.

When you are watching the World Cup this summer, you might be surprised to learn that over 100 national team players played in the EPL last season. These players likely started in youth academies, were involved with clubs that have been promoted or relegated, and are probably wearing smart trackers under their jerseys to generate data. Similar innovations can be applied by enterprise retailers to elevate their drop ship programs to championship form.