BrainTrust Query: Are Retailers Partnering With Brands or Biting the Hands That Fund Them?
Through a special arrangement, presented here for discussion is a summary of a current article from the Mark Heckman Consulting blog.
Over the last twenty years, several industry movements have served as catalysts for "partnering" between retailers and suppliers. Category Management (CM), Efficient Consumer Response (ECR) and, more recently, Shopper Marketing-Path to Purchase (PTP) have led to co-authored and co-funded studies that generated books and presentations. But lasting partnerships among brands and retailers, not so much.
Reasons for less than optimal results abound. The truth is that on key cultural and process issues, brands and retailers are wired very differently. Retailers live in the moment. Brands often live in the future. Retailers adjust the components of their businesses hourly, while brands deliberate and strategize over months and years. Brands move managers and executives relatively quickly through their organization, while retailers tend to keep their team members in positions longer. Both feel they "own" the customer and are keenly anxious to extend that advantage. For these reasons and others, many retailers continue to "bite the hand" that funds them. In turn, brands continue to believe they represent a significant portion of the retailer’s life to form a direct-to-shopper relationship. Both practices are unwise and bode poorly for the future.
Technology and a sagging economy have given rise to a new variable, namely the empowered shopper. This shopper has seized control of the conversation and is quickly demanding better information, more relevant deals, and more efficient shopping alternatives that only the brand and the retailer together can deliver.
Loosely translated, retailers with data and new shopper touch points need insights and content from brands to cater to the insatiable appetite of the new empowered shopper. Sure, brands and retailers can try to go it alone, but given the short window of opportunity, new competitors pouring through that window each day, and the impatience of the shopper, it is hard for me to image anything but the power of a well formed partnership providing the best solutions for the new millennium.
As with all things that yield positive and timely results, there are requisites for success. Here are some:
- Lasting partnerships are formed typically at the top of each organization. The commitment must be clear and consistent.
- A good partnership has an accountable contact person on each side of the relationship who must answer the bell when things get bogged down or do not flow as expected.
- Outcomes must be clearly communicated with success metrics known to all.
- There must be equal or near-equal benefit from the relationship.
- The partnership must grow and evolve, rather than stagnate and become mundane.
- Brand-Retailer Relationships: "Partnering" or "Biting the Hand that Funds You" – Mark Heckman Consulting
What are the keys to overcoming the diverging agendas of trading partners? Do you see any new approaches emerging — by way of technology or new processes — that promise to improve trade partnerships?