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Collaboration with Suppliers for Assortment Optimization – Part 2

The most impactful information a retailer can share to its suppliers is loyalty data which gives true customer insight into the behaviour, purchasing patterns and demographics of the supplier’s brands and the impact of promotions and innovations. Loyalty data is a brand manager’s dream and a retailer can leverage that to build category share and larger baskets. It’s also no secret that the most loyal shoppers, those that represent sixty to seventy percent of a retailer’s sales, only spend fifty to sixty percent of their dollar with that retailer. Loyalty data and loyalty analytics allows retailer and supplier to work on strategic and tactical efforts to make your ‘loyals’ more loyal.

Suppliers also have a gold mine of insight that they can share to retailers.  Large marketing research investment is made to understand what consumers think of categories and how they shop them.  Procter & Gamble famously visits consumers at their house to observe how they interact with the product.  These vendors are able to supply data-based consumer decision trees that can guide the level of assortment needed for each key segment in a category ( category-management ).  Vendors will also perform shop-along surveys to learn what shoppers think of a retailer’s merchandising and prices and how decisions are made.  Importantly, suppliers can bring key market performance data from syndicated scan data providers to determine assortment recommendations.  Panel data can be used to share key metrics like shopper conversion, the number of shoppers in your store that purchased the category, and benchmark that to other retailers.  The best vendors bring invaluable consumer insight to the table and with that, a pipeline of innovation that capitalizes on these insights.

Joint execution on key programs can also pay dividends for both parties.  Vendors often tap into licenses or unique insight to bring differentiated programs to the trade.  A genius marketing idea is about as good as a terrible one if it fails to be executed in store effectively.  Vendors want to partner with retailers that can ensure store level execution.  It is key for them to get speed to market on innovation and ensure displays are available during peak demand.  Similarly, retailers need programs provided to them that meet the needs of their shoppers and match their strategies.  Cookie cutter programs are far less likely to inspire commitment and execution.

With the aim of satisfying consumers and the sharing of unbiased insights, strategic partnerships between retailers and suppliers have proven to deliver superior returns.  Take the time to ask yourself, what you can share with your suppliers to make them more effective and press your suppliers for greater insight.

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November 19, 2012 | Gerald | Assortment Optimization, Data Insights, Merchandising

30 Comments

  1. Mikie Says: April 19, 2013 2:49 pm Reply

    Sharing of information is only growing by the day between retailers and manufacturers. Having the tools in place to facilitate this is going to be key in the future.

  2. Mike Says: April 19, 2013 2:49 pm Reply

    Collaborative efforts between retailers and manufacturers has the power to uncover insights that would otherwise lie dormant

  3. Mike Says: April 19, 2013 2:50 pm Reply

    Vendors can enhance their understanding of a retailer’s merchandising by analyzing the new reporting solutions available with ToolBox Advantage.

  4. David T Says: April 19, 2013 2:50 pm Reply

    Joint knowledge sharing between any aspect of the supply chain will provide nothing but great insight, and make relationships much more effective

  5. Tay Says: April 19, 2013 2:50 pm Reply

    The goal should always be to help the overall category grow. If the overall category grow’s than both the retailer and the manufacturer gain. Sure there are always additional ways to ensure gain’s occur to support the #brand you support. @toolboxsolution can help!

  6. Stephen Yoon Says: April 19, 2013 2:50 pm Reply

    Leveraging Retailer loyalty data with Supplier’s insight of the market they participate in, is a great form of collaboration.

  7. DonWuan Says: April 19, 2013 2:51 pm Reply

    Companies can boost profits by almost half by retaining just 5% more of their customers.

  8. Ian McClennan Says: April 19, 2013 2:52 pm Reply

    Collaboration between retailers and suppliers is a great way to increase the quality of insights.

  9. Jason Says: April 19, 2013 2:52 pm Reply

    Loyalty analytics represent an great way for retailers and suppliers to better understand who buys their products and represent the next wave of data insights.

  10. Tommy Says: April 19, 2013 2:52 pm Reply

    Loyalty data can be leveraged to maximize profits from your best customers.

  11. Jason Says: April 19, 2013 2:53 pm Reply

    Toolbox has some great tools to assist in store level execution. Check out our mobile solution for in-store planogramming.

  12. Dave Olsen Says: April 19, 2013 2:54 pm Reply

    It’s important that vendors and retailers get the best insights possible into consumers buying habits.

  13. Brenda Says: April 19, 2013 2:54 pm Reply

    The insights available will provide Retailer and Vendors help them narrow their investments on setting up customer research groups.

  14. David S Says: April 19, 2013 2:54 pm Reply

    It all comes down to execution! The key to success is buy in at all levels, for both the vendor and the retailer.

  15. Curtis HL Says: April 19, 2013 2:55 pm Reply

    I agree, cookie cutter programs are far less likely to inspire commitment and execution.

  16. Tammie Says: April 19, 2013 2:57 pm Reply

    Great article! It shows that companies can gather all the data they want, but if they don’t analyze it and use it effectively it is useless to them.

  17. Micheal Says: April 19, 2013 2:57 pm Reply

    Collaboration, truly working together to move the category forward in a positive way for both parties and tailoring programs to meet the specific needs and targets for a retailer is the only way to go for long term growth.

  18. Jeff Says: April 19, 2013 2:57 pm Reply

    Products go through many channels to make it into a store; and efficiency and insight on data at every checkpoint is very important. When everyone comes together and shares insights through the same platform it gives everyone the best chance for success.

  19. Kristine Says: April 19, 2013 2:59 pm Reply

    Another opportunity for retailers and vendors to collaborate with the use of loyalty data and build the best assortment for the consumer. But I agree with John’s point about it’s one thing to build it, but another to implement. So make sure the insights reach store level!

  20. Karen Says: April 19, 2013 3:00 pm Reply

    Great article. Vendors working with retailers and sharing research data is a great way for the retailer to see valuable data they don’t normal see and get a better understanding of their consumers. Building and sharing data helps build strong working relationships and a win, win for both sides.

  21. silvio Says: April 19, 2013 3:02 pm Reply

    Loyalty data is becoming key in effective category management indeed. Great post.

  22. Valeria Says: April 19, 2013 3:02 pm Reply

    You said it best “A genius marketing idea is about as good as a terrible one if it fails to be executed in store effectively.” Joining forces and sharing loyalty data benefits both parties greatly in an effort to effectively execute great ideas which lead to great insight and great sales. Thus, everyone is happy :-)

  23. Marenos Says: April 19, 2013 3:07 pm Reply

    There is a difference between ‘Neat to Know’ and ‘Need to Know’, Loyalty data provides the insight for Retailers and Brand Managers to understand the goal of satisfying the consumer and meeting their everyday needs. A combination of consumer insights, and well managed merchandising is the key to winning at retail!

  24. Tim Says: April 19, 2013 3:22 pm Reply

    Quite often, the retailer and manufacturer only have half the pieces to the puzzle. By sharing data and collaborating to create tailored programs, both will reap the rewards

  25. Paul Says: April 19, 2013 3:27 pm Reply

    As stated, execution is key. All the best plans in the world are useless if not executed upon. Great post!

  26. Amir Jafary Says: April 19, 2013 3:49 pm Reply

    With mobile solution provided by Toolbox, retailers can get more advantage from their planograms.

  27. David Says: April 19, 2013 4:37 pm Reply

    This just shows that retailers and manufacterers need to collaborate in order to be successful in the CPG industry along with strengthening the consumer loyalty. Best way to be effective is ask the right questions.

  28. Wingfai Says: April 19, 2013 4:38 pm Reply

    Collaboration between retailers and manufacturers benefits both parties, but of course this only works if it’s property executed.

  29. JohnA Says: April 19, 2013 7:32 pm Reply

    Both parties benefit from increased collaboration. Suppliers have a wealth of studies from usage & attitudinal, to shopper surverys, to HomeScan panel data comparing retailers.

  30. Marcell Says: April 25, 2013 2:43 am Reply

    Solid execution is key. Your plan means nothing if you cannot have it executed as inteded.