Collaboration for Profitability


In the earlier days of retail, manufacturers and retailers collaborated on simple ways to get the most products into the store at the right time and at the right price. That led to an entirely new range of fee structures including slotting allowances, end cap allowances, promotional allowances, and so forth, all of which were designed to drive consumption to a level of profitability that was acceptable for that point in time.

However, over the years as the retail market expanded, new types of collaboration began developing. First came joint business planning, an annual process in which a retailer and manufacturer would design and develop a plan for the next year in a given category. Later on, we entered a new era of data sharing, where retailers and manufacturers began to look together at how markets, stores and shoppers were actually performing statistically.

Today, collaboration means taking a more "seamless" view of the shopper, in which both the retailer and manufacturer share in thinking, share in understanding, and share in actionability. This "next generation" collaboration can be characterized as a seamless Retailer/CPG organization whose ultimate goals are growth and profitability, not just placement in the store. It means both parties become focused on outcomes rather than activities. Techniques being employed include such things as shopper “needs and usage states” category management, personalized shopper engagement through advanced digital marketing, and in-store displays that actually excite and invite the shopper to experience the product/solution/platform within a given category.

Working together, retailers and manufacturers concentrate on how to grow a category, how to develop a new merchandise platform, how to improve the supply chain, how to reduce out-of-stocks, and most importantly, how to improve overall profitability for both parties.

The services provided by Dialogic in this area help both parties understand what a true "next generation" collaboration model can look like, provide a road map to get there, explain the capabilities needed, and define the steps that each party should take to achieve true "next generation" collaboration that can drive unprecedented business results.