IDC Assesses the State of Retailer/Supplier Collaboration

In 2011, manufacturers and retailers continued to struggle with private label and private brand in the current economy, and many looked to collaboration as a means of bringing back old customers, increasing the loyalty of new customers and better serving all of their customers. This year, consumer sentiment is a much-discussed topic. Are consumers ready and willing to shop? One month the answer seems to be "yes" and the next "maybe not".

 

On March 13, 2012, two IDC directors — one from the manufacturing side and one from the retail side — talked about the state of collaboration between manufacturers and retailers. The topics came from key findings of the 2011 Shared Strategy Report, conducted by CGT, RIS News, IDC Retail Insights and IDC Manufacturing Insights.

 

-- Leslie Hand, research director, IDC Retail Insights, set the stage by reviewing some economic indicators, net profit margins and inventory trends in the manufacturing and retail industries. “Retailers are carefully analyzing how each promoted item impacts overall revenue and profit to make sure that they can ensure profitable performance at the end of the day,” Hand explained. She also talked to organic collaboration, defining it the intention to differentiate the collaboration of today from years past, based on the notion that collaboration today is a natural outgrowth of business process change enabled by technologies that are inherently collaborative. She believes that this is important because in a customer-centric world, where the consumer has the power, the benefit is even greater for a shared deep understanding of the customer and market requirements.

 

-- Simon Ellis, practice director, Supply Chain Strategies, IDC Manufacturing Insights, talked about supply chain segmentation, saying that it is about designing supply chains at a product category or family level based on the unique needs of those product groupings. He also believes it is a way to align products, processes or platforms that have different business or market requirements, drivers of value, and/or cost structure. “I think what we’re tending to see that segmentation — and as I said before, segmentation is not new — has been revived, resuscitated and renewed. I think companies that dismissed segmentation as a way to help manage their complexity in their supply chains have been revisiting it as a tool in the toolbox to help them manage that complexity,” he explained.

 

-- E.J. Kenney, vice president, Consumer Sector, SAP America, closed the web event by offering his point of view on collaboration from the solution standpoint. “When you heard all the items that Leslie and Simon talked about — organic collaboration, understanding consumers differently, and being able to influence demand as well as mass customization and personalization — all of that requires a different set of data, a different business process. It’s more about understanding than it is communication,” Kenney said.

 

To listen to this event in its entirety, click here.