Retailers need strong manufacturers and manufacturers need strong retailers. When one party becomes weaker, the entire channel suffers.

And the primary area where manufacturers are failing is in spending the money needed to create awareness of their product and brand value — awareness that increases store traffic and pays off for both retailers and manufacturers.

However, the incredible pressure to discount from retailers also forces such low margins on the manufacturer that they can’t afford the investment in advertising needed to create demand for the value they bring.

We’ve had tremendous success solving the problem when retailers and manufacturers team up with commitments which make it possible to afford the significant advertising investment needed to create the mass-market perception of value.

Unfortunately, these team situations are rare. And that leaves new products supported by such small communication budgets that they have no choice but to hope for viral success — but they’d be better off standing in Grand Central Station whispering their new product value than trusting in the viral hope.

The most collaborative manufacturers are approaching retailers as partners.

For decades, leading suppliers have focused on solving problems with retailers that transcend the supplier’s portfolio of brands and products (focusing on growing and supporting categories, departments, store formats and corporate initiatives).

The modern strategic supplier is consulting and supporting retailers in all aspects of their business — including in lofty areas like their business model and how to adapt to a changing shopper and changing competitive landscape.

These retailers and suppliers recognize their co-dependence and shared destinies amid rising stakes.

Simply put, the greatest miss by suppliers is the fact that omnichannel is the new normal.

The product-centric selling of the past is no longer working or profitable for retailers. Retailers can’t afford to just buy a “product line.” They need long tail strategies, curated assortments by store, drop ship for fulfillment to homes and rapid replenishment for click and collect. And the list goes on and on.

In today’s omnichannel world retailers need more than “suppliers of products.” They require strategic partners who can meet omnichannel consumer demands of “anytime and everywhere.”

Regardless of the contractual agreements in place, retailing is a consignment business. Integrating new technologies and their associated business processes, manufacturers, retailers and shoppers alike will benefit from acknowledging this reality. By monitoring and tracking each product from manufacturing (even sub-assemblies in some situations) all the way through to the retail shelf and beyond manufacturers can maintain a near real-time visibility on every item in the distribution and supply chain. This allows the manufacturer to manage production and out-of-stocks in order to provide their customers a frictionless in-store shopping experience. The retailer pays for the items sold, the supplier knows immediately what items are selling in specific markets and locations and can maintain production and stocks accordingly. Retailers such as Macy’s and Walmart already are establishing the foundation and infrastructure for this very process. I believe this process IS the future of brick-and-mortar retail.

If manufacturers and retailers really collaborated, they would be focusing on their joint consumers. Understanding joint consumers would have each team facing a specific group of consumers that is different for each team — not only on the company level but also at the store level. If that were the case, assortments would better match what consumers want and predicting demand would be more successful.

We are at the point in our research capabilities that we should be able to forecast well the impact of promotions — I’m surprised that this remains an issue. There is no reason to run short of product, from the supplier’s perspective. I’m also surprised any retail buyer would even consider a new product or a line extension without some research showing its impact on the brand and the category.

Even with all the data collected on shopping behavior, or perhaps because they’re just swimming in the data, there is still a fundamental disconnect between many manufacturer marketers and front-line retail managers. As much as those marketers, who typically sit in offices in New York, Chicago and LA, try to predict what what works to create demand at retail, their viewpoint is jaded by how and where they live. How much can a 35-year-old hipster with a beard and tight pants living in Brooklyn really empathize with a 42-year-old housewife with three kids living in a suburb of St. Louis?

As for the most critical complaints, if retailers don’t have the product they can’t sell it. Manufacturers need to do everything possible to ensure in-stock positions for all products supplied at all times, especially those on promotion.

Given the nature of the relationship, I believe there will always be some tension between retailers and manufacturers. I agree that the retailer complaints expressed in the article are indeed valid, but the suggestion that manufacturers have their act together does not square with my personal experience. Many manufacturers, except the largest, often didn’t have a good understanding of their demand or provide meaningful category insight — they often asked us, the retailer, for market insight.

The best manufacturers viewed our relationship as a partnership and shared information on potential demand, pricing strategy, etc. Most importantly, they were candid with what they didn’t know. I appreciated that. The fact is, retailers still decide which manufacturers they will work with or will not — manufacturers aren’t perfect, and retailers can do themselves a favor by being very clear about what they expect from the relationship.

Retailers and manufacturers would be ahead of the game if they focused on a true and two-way relationship with core shoppers of each retail chain. The days of mass influence are about over, as shoppers today expect that if “you know me and I give you information about what I want, then you should respond and reach out to me accordingly.”

Retailers and brands working together to react to and deliver upon the expectation of personalization will have more success together than individually. Doing this right takes a village made up of folks from multiple disciplines from both camps. It’s most successful when a neutral lead (agency or consultant) can help negotiate hurdles and keep the team focused on the needs, wants and expectations of the shopper!

Perhaps the relationship should move the manufacturer from being a supplier to becoming a partner. Two heads are better than one. Synergy plays a role here where the sum of the two (manufacturer and retailer) is greater than the parts. When a manufacturer can share knowledge that is helpful to the retailer. It may translate into more sales, and the retailer will (at least should) reciprocate with bigger orders.

One of my favorite examples of this, while not necessarily a retail example, is when Ford asks its suppliers to cut prices. But it did so collaboratively. In other words, there was an effort to work together so that the price reduction didn’t reduce the supplier’s margins. They came up with creative solutions to save money. And the same can happen for manufacturers and retailers. It doesn’t have to be price. It can be anything that the two sides collaborate on to create better results.

Obviously this discussion has hit a nerve and rightfully so. We, as an industry, have been talking true collaboration forever and change has certainly not been happening fast enough for both sides. There are many things that need attention and my fellow BrainTrust contributors have already addressed many of them.

I believe the most important change that will lead to action is to strategically work together to grow the category and not just your brands. The buyer will not and should not listen to manufacturers that talk “partnership” but only push their brands instead of helping the buyer grow the category. If you work to grow the category for the retailer, the rest will take care of itself. There needs to be a longer-term view. Furthermore, until senior management from both the manufacturer and the retailer allow this longer-term view, we will be talking about this same issue year after year. Quarterly results do not make for a sustainable growth strategy.

The failure to accurately predict demand is a perennial challenge that both manufacturers and retailers need to address together. And we’re seeing that happen with innovative partnerships today. These organizations are looking introspectively to discover the “dark” data within their own systems that can help identify demand signals. They are also leveraging external, unstructured data sources like weather, local events, news, social chatter and other forces that affect demand. I believe the time is now to put this challenge in its place once and for all. Again, this all stems from effective collaboration. Easier said than done, however it IS possible, as is being proven in the marketplace.