In recent months, the concept of Shopper Marketing has taken on a very high relevance in the work agendas of retailers and manufacturers. The reasons are quite obvious: Shoppers have been forced to review their buying habits. But the game has changed – and yet many retailers and their suppliers still operate with old practices for their benefit, missing out on valuable opportunities to collaborate through the process of the Joint Business Plan.
Much has been written in recent years about the importance of collaboration between retailers and manufacturers (joint initiatives that go beyond the normal course of day-to-day business, to achieve significant improvement in medium and long-term results). While the importance of collaboration may seem obvious, implementation is often difficult and complex.
Neither with you nor without you: a relationship that does not walk.
Many retailers and manufacturers believe that most collaboration initiatives have not worked due to a lack of commitment or interest from the counterparty. When we take a closer look at what's going on and talk independently with each side, we find deep frustration at the inability to make the relationship work on their terms. We hear phrases like "the client always does what he wants", "does not comply with what was agreed", and "does not collaborate". THERE IS A CLEAR IGNORANCE OF THE BUSINESS MODEL, STRATEGY & NEEDS OF THE COUNTERPART Retailers:
The retailer thinks in terms of store performance, categories, and SKUs.
The retailer thinks about how to bring more Shoppers to his store, how to increase the value of the sales ticket and reduce costs.
The retailer thinks about increasing the gross margin and markup by category and product.
The store space is the unit to be maximized in terms of billing and profitability. Every m2 counts!
The retailer makes comparisons between providers in the same category.
Manufacturers:
The manufacturer thinks in terms of the volume and profitability of a market
The manufacturer thinks about how to increase volume through physical and digital channels and stores
Some manufacturers have decided to open a digital direct sales channel to Shoppers, which places them as competitors of their main retailers.
The manufacturer sees the commercial conditions as a “cost of sale”.
The manufacturer tries to maximize the Gross Margin for every 1,000 units sold.
The manufacturer makes comparisons between stores, channels, and regions.
TOGETHER they win when they focus their attention on The Shopper.
Both parties rely on the Shopper to grow their business while relying on each other to effectively influence their buying behavior.
Retailers:
They own the information of the SALES TICKET by Shopper.
They also have information about specific customers registered in loyalty programs.
They are responsible for the Quality of the Shopping Experience and retail execution.
Manufacturers:
Owners of the main categories and brands desired by the Shopper.
Responsible for the control of the logistics of dispatching the product to the store.
Manage a lot of information about market, consumer, and purchasing trends by category and channel.
Professional support of advertising agencies and market consulting.
It has to benchmark information of similar stores.
How does TMC contribute to the Joint Business Planning process?
Based on our experience, we offer support to manufacturers or retail chains who are interested in building Joint Business Plans for the most relevant categories to speed up their business growth. This job is carried out in four steps driving effective collaboration:
Why is it worth working on the Joint Business Plan?
Any successful collaboration model between two or more companies requires a foundational structure that clearly defines the rules of the game and the contributions of each of the parties to ENSURE THE COMMITMENT.
Generation of mutually defined expectations and alignment of objectives What do we hope to achieve?
Operating Model How are we going to work together?
Inputs and resources What and how much are we each going to contribute?
Definition of metrics What indicators are necessary to assess progress?
Generation of Actionable Insights
Design of the Joint Business Plan
Monitoring and Control
Written by Carlos Ignacio Alfonzo, managing partner of TMC Consultores Comerciales. If you are interested in learning about TMC's consulting or training products in this area, write to us at contacto@tmcconsultores.com and we will immediately contact you.
If we are not yet connected on LinkedIn, it will be a pleasure to have you in my network of contacts. If you want to evaluate the Shopping Experience of your customers in your strategic stores, write to me at cialfonzo@tmcconsultores.com and we will schedule a meeting.