Demystifying the role of a CLM platform in Retail Contract Management

How do you improve vendor management with an AI-powered contract lifecycle management platform? This blog takes a deep-dive into how the retail space manages contracts across functions, the challenges in contract management, and why contract automation is the need of the hour to improve vendor relationships.


Sreyesh Sarma


4 min read

Business person at a warehouse

Globally, the retail industry has seen a tough couple of years. To start with, offline and online retail margins face pressure due to the pandemic’s aftereffects. A persistent inflationary climate further tightens revenue pressures. Deloitte’s research indicates that just one-third of retail industry leaders feel confident about retaining or improving profit margins in existing market conditions. 

Evolving customer preferences make it harder for retail businesses to stay relevant. Agile, integrated, and data-driven operating models are the need of the hour in retail. 

Strong relationships, operational insights, and real-time decision-making drive retail businesses. This is where contracts streamline the retail player’s synergies with vendors, partners, employees, and customers. Tightening regulatory requirements also call for contract management efficiency. 

Retail businesses require contract management in:

1. Commercial operations

2. Real estate management

3. Procurement processes

Contract data, insights, and visibility allow retail businesses to adapt to market demands. For example, demand fluctuations might call for mid-term supplier contract amendments or rebalancing of warehouse portfolios. 

Contract Management Challenges in Retail

Legal and contract management teams in Retail manage thousands of active contracts at any point. Valuable information captured by contracts is often lost, and spread across disparate agreements. Business risk increases, even as legal efficiency drops. In this context, technology-driven Contract Lifecycle Management (CLM) is essential in Retail. 

Traditional CLM technology cannot address the new-age retail segment’s demands. These tools create legal bottlenecks—from inefficient authoring and version controls to the lack of a single source of truth. 

Insufficient visibility of contract data due to multiple stakeholders is the biggest challenge in Retail at present. Long contract authoring turnarounds (and delays) is an example of how expensive these can be. Mid-stream contract amendments to facilitate customer preferences or supply chain changes are another example. Legal teams often spend considerable time and effort searching for relevant contract data in such cases. 

Lack of collaboration capabilities and real-time insights leads to underperforming contractual outcomes. These issues also affect new contract negotiations and conflict resolution. 

Other contractual challenges faced in commercial operations, real estate management, and procurement teams in retail include:

Outlays, customer preferences, or competition create vendor management problems

SKU pricing fluctuations due to multiple channels, promotions, and margin requirements

Inflation-related management of procurement costs 

Different regulatory compliance mandates across locations due to global operations

Lack of real estate portfolio overview dashboards

Property acquisitions, rebalancing, and disposals

Lease administration and property utilization 

Optimizing facility management costs

Business risk mitigation 

Sustainable procurement mandates

As omnichannel Retail and Marketplaces become common, issues like lack of CLM software or offline CLM systems create an all-new challenge. Emerging trends like Direct-To-Consumer business models call for ongoing innovations in this space. 

First-generation CLM tools specialized only in one aspect—just on the buy-side or sell-side. Omni-channel retail and newer market opportunities require end-to-end management of contract lifecycles across channels. 

The Need for a Smart CLM

Intelligent CLM leverages developments in Artificial Intelligence (AI) and Natural Language Processing (NLP). Its powerful features like instant contract data access and real-time insights make these solutions ideal for Retail use cases.

Retail businesses can leverage Intelligent CLM tools for benefits like: 

Consolidation and access to every contract value in your portfolio

Automatic digitization of historical contracts

Bird’s eye view of Commercial, Real Estate, and Procurement contract data

Reduction in contract authoring turnarounds by up to 40%

Frees up legal teams for higher-value assignments

Increases collaboration with all stakeholders

Timely approval and payment workflows

Simpler contracts, easier mid-term amendments

Decrease in spending of up to 12%

Risk reduction across the contract cycle

Better contract compliance within the business

Customized Retail process specific CLM tools 

Faster CLM solution go-lives

Instant access to every commitment

Earlier, CLM tools in retail faced post-signature obligation management issues due to lack of data sharing. Intelligent CLM software combats these issues via AI-based tracking of contractual commitments. 

Collaboration using chats and centralized communication threads streamlines data sharing. Made-to-measure user dashboards ensure faster decision-making. Automatic escalation of non-compliance ensures ideal outcomes.

Intelligent CLM solutions ease mid-term amendments. Leading retail businesses use such capabilities to meet changing market conditions. Features like alerts for upcoming renewals prevent losses and penalties. 

Intelligent CLM solutions: The must-haves

CLM software has come a long way since its initial contract automation days. With a strong Legal Tech component, Intelligent CLM solutions enable the omnichannel retail revolution.

Next-generation Retail models call for agile contract management processes, metrics, tools, and risk management. Dynamic use of suitable technology will accelerate decision-making and fulfillment of obligations.

Ongoing optimization of contract management workflows is equally important on this front. Intelligent CLM software like SimpliContract achieves these objectives using:

  • Customizable Dashboards, along with utilization and revenue optimization reports
  • Self-service contract initiation wizards and Office 365 integration for business users
  • Vendor performance and customer satisfaction insights
  • Conversational and advanced search capabilities for instant retrieval
  • Data extraction as well as scoring of third-party templates and clauses
  • AI-led, collaborative authoring and clause modification on-the-go capabilities
  • E-signature support alongside Dynamic Approval capabilities using Chats
  • Milestone tracking and contract renewal alerts
  • Comprehensive audit trails backed by end-to-end security and access controls
  • Integration with ERP, CRM, P2P, and S2P apps

Choosing the right intelligent CLM solution is just the beginning. Optimal CLM rollouts require a partner with end-to-end implementation experience. The CLM vendor must be able to enable solution adoption among your business users and other key stakeholders. 

For instance, you can prepare for your retail CLM implementation with a consultation session from SimpliContract. Our team consists of lawyers, technical experts, and contract management consultants who can assist your organization on the CLM journey. This is backed by SimpliContract’s 24x7 support. 

To sum up, legal transformation has become an essential hygiene factor in modern businesses. Contracting process optimization is a great way to start off your retail business’ legal transformation objectives. When backed by Intelligent CLM, this project paves the way for nimble, agile, omnichannel business models that withstand market turmoil. 

Contact us today to learn more about Intelligent CLM’s transformation potential in the retail industry.