This isn’t a new or novel recommendation — it’s been suggested for years, long before Amazon became one of the driving forces for innovation in retail. Now, however, it seems even more critical to success and winning customers and sales.
For the purposes of this article, the focus will be collaboration between suppliers and retailers. Even narrowed down to these two parties, there are many ways companies might approach a more collaborative relationship. A 2009 Booz & Co. report suggests participants start with process improvements, cost reductions and revenue/margin enhancements for ways to improve business for both parties. It goes on to suggest that companies should come up with a comprehensive list of possibilities but focus on those “that are most important to both businesses.”
For instance, sharing data and/or boiling down combined big data into meaningful insights to lead to purposeful actions could lead to both cost reductions and revenue growth. There are service companies that offer solutions for delving into this data, such as IRI and Market6. An IRI white paper from 2018 states, “Integrating supply chain data with point-of-sale market data allows gateway participants to grow 4.1% faster than nonparticipants.” Based on that growth rate, finding a way to look at data from both viewpoints should reap rewards.
Another way suppliers and retailers can work together is to ensure online and in-store experiences align. One of the simplest ways to do that is to represent the product accurately online and in promotional pieces so when the consumer looks at the item in any setting there is no difference and thus no confusion. This seems like it should be low-hanging fruit, but surprisingly this is not always in sync. Reliable content and images for products may be accessed from the supplier directly or from a third-party provider. Brand loyalty based on these consistent images and information being available across platforms builds trust in the retailer.
MARTEC International found in its 2016 research commissioned by Relex Solutions that in the context of forecasting, North American retailers are most concerned with new products, with 73% seeing it as an issue compared to 58% for all retailers. This may be attributed to more new products tending to be introduced in the U.S. than elsewhere.
Involving retailers in product launch plans is critical to success and can help alleviate one of their primary concerns. In order to help retailers forecast a product’s contributions to category sales with some accuracy, suppliers can work with third-party companies that are experts in analyzing syndicated data and use their industry experience and business intelligence to develop a trustworthy estimate of sales, based on competitor footprints, sales and promotions. Suppliers with a strong launch plan that includes a data-based rationale instill more confidence in retailers that the product will draw customers and meet forecasted revenue goals.
The examples here are only a few of the areas that would benefit from collaboration. Alignment in fulfillment for speed in delivery of online orders, and along those lines, inventory management, can also make operations more streamlined. Locate the greatest pain points and start there. Mutual success should follow.
Megan Moyer is an industry researcher and writer with Hamacher Resource Group Inc. HRG focuses on improving results across the retail supply chain by addressing dynamic needs such as assortment planning and placement, retail execution strategy, fixture coordination, item database management, brand marketing and analytics.