Colin Dyer, chief executive of the World Wide Retail Exchange, has set his sights well beyond the traditional buyer-seller relationship. WWRE is not only about transactions, but about interactions too. And this exchange of information and know-how can only deepen the relationship between retailer and manufacturer.
Elsevier Food International, Vol. 4, Number 2, May 2001
Pascal Kuipers

For suppliers, B2B Internet platforms increase competition. The first auctions carried out via WWRE suggest improvements for retailers on both resalable and non-resalable articles. Ahold apparently saved 3.5 per cent on its first auction for shrimps; Tesco gained 12.5 per cent on an auction for corned beef and Casino saved 15 per cent on stationery articles. According to analysts at the merchant bank Kempen & Co, the main reason for falling prices is the fact that B2B platforms such as WWRE make competitor pricing highly visible and open up tenders for a large number of suppliers. It remains to be seen, though, if this changes the balance of power in favour of the large retailers. Suppliers also benefit from falling supply-chain costs. But analysts acknowledge that, increasingly, suppliers will have to compete on a worldwide basis in order to be able to resist the permanent pricing pressure that platforms such as WWRE create. Elsevier Food International spoke to Colin Dyer of WWRE about B2B and the future of his organisation.

Colin Dyer began his career at Lloyd's Bank International in Amsterdam and also served as a consultant and client manager at McKinsey and Company. He joined WWRE in September 2000 from Courtaulds Textiles PLC, where he served most recently as the company's chief executive. At Courtaulds, he implemented a broad reorganisation programme and masterminded a series of strategic acquisitions for the company, prior to its purchase by Sara Lee in May 2000. Colin Dyer holds an MBA from INSEAD in Fontainebleau, France and earned his BSc. in mechanical engineering at Imperial College, London. He serves on the board of Northern Foods, a major supplier to British retailers.

In recent months, many vertical B2B portals have gone out of business as quickly as they've emerged. Does the huge number of B2B bankruptcies have a negative impact on the credibility of B2B E-commerce?
"First of all, let me say that the belief in B2B E-commerce is unshaken. The large number of CEOs from many different companies and sectors who attended the last World Economic Forum in Davos, Switzerland, all acknowledged that B2B E-commerce is key to their businesses' future. The question is, of course, how best to assess B2B E-commerce. Many of those small portals didn't actually go bankrupt - they simply lacked the capital to stay in business. The people behind them chose the wrong business model. Their organisation was too small to deal with the huge costs of developing software and services, and of building a clientele. A robust and well-funded organisation is needed to make B2B E-commerce work."

Does this mean that a successful B2B E-commerce initiative can only spring from traditional industry structures?
"Not exclusively. But it'll surely stand more chance of success when it's the bi-product of an existing industry set-up and is handled solely by partners who're prepared to invest the effort required. WWRE is backed by 53 retailers, all of whom are investors and all of whom are committed to making it work - it has a solid foundation. The retailers already have an existing clientele; but companies can also use WWRE to expand that clientele."

Five years from now, do you think a large percentage of the retail members' purchases will be made via WWRE?
"It's up to them. We won't force them to purchase a minimum volume via WWRE. WWRE isn't replacing the retailers' traditional purchasing methods. It is a complementary option that eases contacts with suppliers while adding accuracy and efficiency. We anticipate that when retailers start communicating with their clients via WWRE, they won't just be dealing with purchasing transactions. Transactions should become interactions, in the sense that information and knowledge is also being transferred via the WWRE system. It deepens the relationship between companies, as contacts progress from buying and selling to jointly developing promotions, exchanging supply schemes and exchanging information on topics such as quality assurance, business ethics, food safety and so on."

But that can happen via traditional communication means too - telephone, fax, even EDI. What value does the Internet add?
"Traditional communication means are aimed only at bilateral communication, while the Internet allows a multitude of companies to communicate at the same time, and in real time. What's more, it enables a retailer to establish company-to-company contact with more suppliers and even their suppliers' suppliers. Communication on all kinds of levels is possible."

Can a company survive without B2B E-commerce? Will neglecting it bring about a competitive disadvantage that could ultimately prove fatal?
"It is imperative to join a B2B E-commerce initiative. Companies that don't will indeed be the losers in the long term. Both research and business experience have shown that those open-minded companies that are willing to implement new means and methods certainly benefit from doing so - and have far better prospects than the ones that don't."

The Global Commerce Initiative is working to agree on global standards for electronic communication. What impact will this have on WWRE?
"By early 2002, global standards must be agreed upon, and the reaching of an agreement is vital to exchanges like WWRE. We're already commercially active, but so far we've limited ourselves to working only in those areas where standards are already in place."

What is the main difference between WWRE and the GlobalNetXchange (GNX)?
"We have 54 members that are also clients of WWRE, and they can use the services that we've developed in an open environment. The members can play an active role in WWRE's new product development (for example, developing software systems), but on the other hand the WWRE management team operates independently. We work for our members and we've got no intention whatsoever of going public."

GNX is co-operating with the suppliers' E-exchange, Transora.com. Will linking retailers' and manufacturers' E-exchanges bring about even more cost savings?
"It's clearly logical to encourage co-operation up and down the value chain.
But first of all, one should examine the added value. We are still investigating the benefits of our current and future services versus the possible gains of linking to suppliers' exchanges. What I do know is that the E-business will develop rapidly - and we're putting our best efforts into implementing our services as quickly as possible."

How do the competition watchdogs respond to WWRE's activities?
"We have excellent contacts both in Brussels at the EU and in Washington at the Federal Trade Commission. We've clearly earned their approval as they've given us the green light to go ahead. They realise that we don't obstruct competition; on the contrary, we encourage it."