Happy New Year! I hope the return to work hasn’t been too painful, although by the time you read this blog we are likely to have seen some mixed news from the retailers in terms of how they have fared over the key Christmas period. And so it is retailers that I’d like to talk about in this latest blog.
Actually, it’s the relationship between suppliers and retailers that I’d like to focus on. For many years we have worked with a wide range of manufacturers providing insights that are used as an input to trading relationships. And we’ve often heard tales of the stresses and strains in the relationship between brands and retail buyers. Perhaps you are reading this thinking: yep, heard about that too, but it doesn’t affect me as I’m in brand marketing. I’m hoping to convince you that it does matter to you, and that every part of the supplier business has a role to play in building a more positive trading relationship.
The reason I believe it matters is because consumers around you are becoming increasingly careful about their purchases. This means year on year sales increases are no longer a given for anyone, even if you churn out enough NPD or have a premium brand. And you should care about the supplier/retailer trading relationship because if your brand is out of stock, or is hidden away on shelf, it already starts on the back foot in terms of persuading shoppers to buy it.
From the retailer angle, there is a growing acceptance that if retailers aren’t in touch with their customers they are going to really struggle in this much tougher economic environment. Yet retailers in the grocery sector can’t hope to be experts in every category they stock – which is where the supplier opportunity comes in. Under the guise of Category Management, trade teams have long been working to use their category level expertise to guide, or persuade retailers, to have meaningful business discussions that drive category growth rather than simply re-allocating margins.
But trade teams can only do so much. Quite often they are caught between a rock and a hard place – the retailer pushing for ranges that meet their specific customer needs, and brand teams that create products to fit their internal consumer segmentation.
To get the most out of the purchase opportunity brand teams need to demonstrate a better understanding of the world into which they are delivering their products. That means working closely with trade teams to understand different account issues and needs, and considering NPD or packaging relaunches from the perspective of a shopper not just a consumer.
2013 looks like being just as tough a business environment as 2012 – with much less to distract us in terms of special events. Manufacturers can play a strong supportive role in helping the retailer get closer to their customers, leading to a mutually beneficial outcome. And I’m willing to bet that the supplier who demonstrates customer understanding will have more success in the long term, than one who simply continues to focus on their own agenda.
Here’s hoping we all have a successful year, whatever crops up.