Special Report: Collaboration

In a perfect world, collaboration would be the cornerstone of every manufacturer-retailer relationship. Do it right, and it's a win-win for both parties. "Collaboration with retailers is essential to achieve our mutual business objectives," says Jamie LaRue, senior director, shopper marketing at Battle Creek, Mich.-based Kellogg Co.The reality is far from perfect, however. While most retail marketers would acknowledge the importance of collaboration, their actions don't always follow suit. "It would be inappropriate to make it sound like there's a lot of [effective] collaboration at this point," says Brian Harris, founder and co-chairman of The Partnering Group, Cincinnati. "I think it is in its early days."In the Shopper Marketing Trends 2011 report, published in January, 47% of consumer product marketing executives surveyed said most shopper marketing programs are jointly developed between retailers and manufacturers, while 38% said most are developed by a manufacturer bringing a program to a retailer, and 16% said most are developed by a retailer creating a platform or program and getting manufacturer participation.And with the collaborative efforts that do take place, there's no guarantee of winning results. In the Grocery Manufacturers Association's 2010 Customer & Channel Management Survey, 95% of respondents said their collaborative efforts that go beyond the normal course of business are either extremely or somewhat effective. But, just 20% of those efforts are realizing the full potential, 50% have only modest impact, and 30% have no measurable impact at all.The expectation is that as shopper marketing continues to take root, increased collaborative efforts will follow. "[Shopper marketing] is fundamentally collaborative in nature," says Harris. "In fact, it probably is the highest collaborative opportunity we have had in the industry for a long time -- maybe forever -- because the shopper is the common language of both the retailer and the manufacturer."Sharing Insights Insights are the "currency" of shopper marketing and collaboration, says Harris. "The quality of the combination of consumer and shopper insights is what makes collaboration worth doing, because neither party has all the pieces of information that are needed. That's where the breakthroughs come from."LaRue agrees that insights are key to successful collaboration. "Shopper understanding needs to drive that collaboration and how we can understand how we might leverage our strength as brands, as well as the strength of the retailer, to achieve those mutual objectives and help the shopper shop," he says.Jennifer Cyra, senior vice president of merchandising for OfficeMax, Naperville, Ill., says that qualitative and quantitative data need to be used in tandem. "Qualitative data includes things like customer research, store intercepts and focus groups," she says. "Some great insights come out of those efforts. It's important to recognize, however, that sometimes what customers say and what they do may be different. That's where the quantitative piece comes in: the sales data. When retailers and their key suppliers share these types of information, both can expand their knowledge and put the story together in terms of what it means and what opportunities exist."Charles Luckenbill, OfficeMax's vice president of visual merchandising, adds: "Collaboration happens when determining how to apply the research. For instance, after extensive customer research, HP [Hewlett-Packard] told us that customers did not find the product fact tags found on the HP shelf displays to be effective. We redesigned the fact tags and received accolades from HP that rate the cards as 'best in class.'"In ideal situations, "the manufacturer's category leadership team will leverage information gained from marketing insights and proprietary studies and bring those learnings to the retailer," comments Rob Colarossi, vice president, category leadership, Hostess Brands, Irving, Texas. "On the retailer side, the buyer and the members of the retailer's research team typically are the first to review those insights. Once the strategy is developed, the retailer's operations and merchandising team provides feedback on the work and aligns on the plan to move forward."Organizational Support Two things distinguish the best collaborative efforts, says Anne Chambers, chief executive officer of The Capré Group, Atlanta. "One, the efforts start at a strategic business level that defines joint business goals that align the retailer and the manufacturer. The second item is broader connections and alignment between the two organizations. True collaborative efforts cannot be limited to sales-to-buyer interactions. Brands must connect in with the retailer marketers and merchants; insights must be shared and in many cases co-developed."Cross-functional participation is important to making the process work. "The conversation needs to take place in a cross-functional team," says Alison Chaltas, executive vice president, GfK Interscope, Westport, Conn. "It can't just be the sales guys telling the buyers. It needs to be marketers, research people, finance, and certainly the merchandisers and sales folks involved in the conversation together. That way whatever that shopper marketing initiative is, it is insight-based, it meets with the company strategies, delivering the two different brand messages (product and retailer). Also, it is executable and works with the overall category management plan."Additionally, high-ranking executives in the organizations need to be involved, Chaltas adds. "It doesn't have to be the CEO, but it probably needs to be the CMO or the head of sales, depending on the organization, to make sure that there is real support and resourcing around it."Jim Hertel, managing partner at Willard Bishop, Barrington, Ill., agrees that collaboration needs to receive more attention within the retailer and manufacturer organizations. "When those people are collaborating, and all playing for the same team, that enhances the programs" and the ability to collaborate with other companies. "Then you can iron out a lot of the executional issues because everybody has a seat at the table."At Hostess, "we have significantly ramped up our investment in collaboration efforts in recent years, and retailers have come to rely on us for our consumer insights and strategic approach," says Colarossi. "We've never looked at collaboration as an exercise merely designed to promote our brands. It's about providing objective, unbiased information that is designed to help retailers implement strategies that drive sales. Delivering this type of value essentially earns us a permanent seat at the retailer's table."Collaboration Done Right Campbell Soup Co. has partnered with mass merchant Meijer on its Mealbox program since January 2009. "Due to this collaboration, we have developed our relationship further with Meijer on all fronts and continue to be valued as a key strategic partner," says Geoff Jackson, director, integrated shopper marketing. "We have had the opportunity for ongoing joint business planning between our teams. Meijer's team solicits our feedback and collaboration in the development of programs. Accordingly, we have the opportunity to be at the forefront of new platforms, and to partner with our own strategies and insights."For Campbell, the Mealbox program included providing six recipes and six digital coupons for each of four annual co-marketing events, says Jackson.Involved in the collaborative process, according to Jackson, were Deb Lehman and Kristie Hill of the Meijer co-marketing team, Al Becklar and Dave VanderMeer of Campbell Sales, and Jeff Arquette, the Campbell shopper marketing representative from MARS Advertising, Southfield, Mich. "As part of planning for Campbell's 2010 fiscal year, we identified the opportunity to integrate non-competing Meijer items into our Campbell's Kitchen recipes," says Jackson. "Since focus on private label was, and continues to be, a top initiative for Meijer, they embraced the idea. We then partnered with Jane Freiman of the Campbell's Kitchen team and with Meijer dietician Shari Steinbach to successfully integrate the Meijer products into Campbell's Kitchen recipes."Campbell took the collaboration beyond the Web and into stores through the Chef Station sampling program at two Meijer stores. This led to the development of a joint positioning (and logo) for Meijer/Campbell's Kitchen Meal Solutions, along with a chainwide sampling event where Meijer shoppers were treated to a tasting of a French onion burger recipe made with Campbell's condensed French onion soup, Meijer cheese and Pepperidge Farm buns. Shoppers also received a custom booklet featuring six value recipes all under $10 that featured Campbell and Meijer products."Campbell is committed to collaborating with our retail trading partners at all levels of our organization," says Jackson. "Within our sales planning and strategy team, we have a particular emphasis on developing actionable shopper insights and then partnering to activate against strategically aligned shelving initiatives and shopper solutions."Moving in the Right Direction "We see a surge in companies pushing to define better ways to collaborate and build capabilities to enable collaboration," says Patrick Fitzmaurice, principal at The Capré Group. "Companies see it as a business imperative, but beyond that, they see it as a differentiator that provides them with a competitive advantage. True collaboration elevates the relationship in many ways, and in many cases can help a smaller player wield greater influence -- we call it disproportionate influence -- with the trading partner."Collaboration does not always come easily, as retailers are concerned about what manufacturers might be giving the competitor that they aren't getting, says Michael Schiff, managing partner, Partners in Loyalty Marketing, Chicago. "But they definitely see that increasing the collaboration is going to be in everybody's best interest in the long run.""It's easy to sit in judgment, but right now I think they are doing the best they can with what they have," says Schiff. "It's just a question of, can they dedicate the resources? Can you get enough people to support it? In this economy, everybody had to get a little bit more selfish, and try to promote their own stuff and not really work together. So getting that collaboration is going to be a challenge, but I do think that they are all heading in the right direction. Everybody wants the same thing. It's going to be a matter of putting the resources behind it."Numbers from an annual survey by GfK Interscope confirm the progress: 71% of a 250-plus sample said they agree or strongly agree that shopper marketing is driving better manufacturer-retailer collaboration, up 7% from GfK's 2009 study."The data supports that shopper marketing is improving collaboration, and collaboration is improving shopper marketing," says GfK's Chaltas. "Shopper marketing is bringing brand marketers directly into the dialog with their counterparts at the retailers."Dan Alaimo and Tim Binder compiled this report.

Special Report: Collaboration

P2PI MEMBERS

JOIN P2PI

Related Topics

Related Images

Business Topic

Market Segment