how can manufacturers and retailers resolve the digital collaboration conundrum?
TRANSCRIPT
How can
manufacturers and
retailers resolve the
digital collaboration
conundrum?
In the age of the
omni-channel consumer the need for collaboration between retailers and manufacturers is greater than ever.
Copyright © 2016 Accenture. All rights reserved.
Consumer expectations around convenience, cost and experience are ever-increasing and challenge retailers more than ever.
Copyright © 2016 Accenture. All rights reserved.
How can retailers and manufacturers work together to conquer this challenge?
Copyright © 2016 Accenture. All rights reserved.
The first step is to identify the obstacles of collaboration standing in the way of their digital journey.
Copyright © 2016 Accenture. All rights reserved.
OBSTACLE #1
Divergent agendas
The retailer is often focused
on maximizing store
profitability and category
optimization, while the
manufacturer’s focus is
squarely on its brands.
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OBSTACLE #2
Lack of trusted data
A lack of trusted data on
products, pricing, competitors
and purchases often holds back
effective collaboration.
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OBSTACLE #3
Information asymmetry
Demand information
credibility and lack of
segmentation insight leads to
a decision-making bias overly
influenced by incomplete past
history and gut feel.
Copyright © 2016 Accenture. All rights reserved.
OBSTACLE #4
Shallow customer
knowledge
While retailers collect a great
deal of data about their
customers, they still do not
know enough about them.
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OBSTACLE #5
Sluggish new product
development (NPD) rollout
Even where there’s a strong
product/market fit, in the
absence of speed and
urgency in aligning
promotions, distribution,
fulfillment and return
processes, NPD decisions
are suboptimal and margins
suffer.Copyright © 2016 Accenture. All rights reserved.
OBSTACLE #6
Flawed success
metrics
In the absence of the right
KPI and clear accountability
for both manufacturers and
retailers, they may end up
focusing on different things
reducing the chances of
launch success.
Copyright © 2016 Accenture. All rights reserved.
So, how can manufacturers and retailers overcome these obstacles and solve the digital collaboration conundrum?
Copyright © 2016 Accenture. All rights reserved.
Retailers and manufacturers must align on broad strategic objectives and commit to a set of priorities focused on achieving these objectives.
Align strategic objectives
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Retailers and manufacturers can derive mutual benefit by investing in business processes that emphasize data accuracy, technology systems with seamless interlinkages, and adopting common metrics and intelligent analytics.
Create a single version of the truth
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Retailers need to invest in advanced analytics to derive a new level of insight, and manufacturers, in turn, should help retailers with new insights gleaned by combining retailer data with syndicated data.
Be data-driven and insights-led
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By focusing greater energy on existing customers, retailers and manufacturers can build sustainable growth without enduring margin compression due to excessive promotions.
Put the customer first
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Back-end integration to mobile apps should reflect the true availability of products, with optimized supplier processes to cater to new distribution formats.
Optimize the supply chain
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The choice of KPIs must balance short-term and medium-term goals with longer-term strategic commitments, with retailers and manufacturers agreeing before starting their collaboration journey.
Be time-bound with balanced KPIs
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The benefits of successful collaboration efforts can be substantial:
Generate 2 to 10
percent in
operating margin
improvements
Raise store-shelf
stock rates by 5
to 8 percent
Reduce
inventories by
an average of
10 percent
Cut retailer’s
logistics cost
by 3 to 4
percent
Yield a 5 to 15
percent reduction
in manufacturing
costs
Yield a 3 to 10
percent reduction
in G&A costs for
suppliers Copyright © 2016 Accenture. All rights reserved.
Copyright © 2016 Accenture. All rights reserved.
Collaboration between retailers and manufacturers is the secret to success in today’s omni-channel digital world.
Copyright © 2016 Accenture. All rights reserved.
ANY QUESTIONS?
Learn more about how to
solve your own digital
collaboration conundrum at:
Accenture.com/digitalcollaboration