Building Blocks of Retailer-Supplier Collaboration: Connections
By Tony Agresta, senior director of marketing, Market 6
When suppliers and retailers discuss “collaboration,” what do they really mean? Is collaboration about coordinated planning or much more? A panel of experts at FMI Connect discussed this topic. As the session evolved, it became clear that some attributes of collaboration are obvious and others more subtle.
Let’s start with the primary business driver for collaboration – The Shopper. The shopper continues to expand her horizons as markets continue to provide options. Overall store capacity and formats continue to rise. Competitive options spring up in markets all the time. The digital path to purchase and direct store delivery represent growing channels. The fact is, shoppers are in control. This reminds me when “churn” in the mobile phone business became the primary driver for more effective promotions, bundled services and lower prices. Shopper buying power has and continues to be at an all-time high.
Usher in collaboration. The end goal is to delight the shopper but reaching collaboration nirvana is no easy task. In the first article of this series (FMI Connect’s Powerhouse Panel on Collaboration), I defined collaboration as “a process jointly shared by retailers and suppliers consisting of planning, budgeting, analysis, promotion and measurement.” Let’s expand on this idea.
For collaboration to work, a complex mix of events, data, people and systems needs to be synchronized into a customer-centric strategy. Visionary suppliers understand this idea and proactively deploy collaborative strategies to address fluid changes on the shopper side, changes that retailers attempt to anticipate and plan for.
What role does analytics play? Sustained growth in predictive analytics and descriptive analytics (data visualization, BI, dashboards) continues to be applied across most sectors. It is also fueling demand in supplier-retailer collaboration. By connecting to more and more data, analysts have the ability to discover patterns and anomalies previously hidden. In turn, they share insights with other members of their organizations. Decision-making is accelerated. Accuracy is heightened. Actions driven from the discovery-collaboration cycle emerge and are applied in a proactive way. Analytics is used in every step along the way from manufacturing through supply chain, distribution centers and retail, the end goal of which is a positive experience for the shopper.
The root of collaboration seems grounded in “connections.” Connections between people, data, processes and organizations drive collaboration. Without connected data, without connected technology allowing for improved planning, budgeting, category management and supply chain management, the promise of “customer-centricity” seems a distant dream. The customer continues to make decisions rapidly. Her buying options continuously expand and so must the rest of the ecosystem.
Connecting the Dots for Collaboration
In discussing how to ensure collaboration aligns with a customer centric strategy, Geoff Kuzio, VP Kroger Team, Campbell Soup Co., made a very interesting statement during the FMI Connect panel on Collaboration. He said collaboration “is about putting the resources, assets and people close to the customer – making sure they understand the customer, not just what it means in sales, but also what it means in logistics, supply chain and insights to provide a strategic advantage.” In this single statement, Kuzio is connecting the dots that define collaboration. He’s connecting all aspects of collaboration to the customer. In some respects, “collaboration points” form a type of connected graph where the strength of the relationship and the distance between each point are functions of how effective the collaborative process is. Are the key steps in planning and budgeting connected? Are products shipping from distribution centers to retailers in a timely, predictable way? Is the necessary data connected allowing resources in separate departments and organizations to visualize the same information?
About half way through the FMI Connect panel, the speakers started discussing how to operationalize collaboration. They pointed to the fact that more resources (both financial and personnel) are being dedicated to data, analysis and alignment between suppliers and resources. This continues to evolve and provides a competitive edge that others simply do not have.
But it’s more than just people and data. Years ago while working for a data visualization company focused on making it easy for analysts to pinpoint meaningful relationships between data, we started referring to the process users went through as “connect, explore and share.” The connection part was about connecting to data. “Explore” focused on fast data analysis and “share” referred to collaboration. But times have changed. Today, all of the needed data is available in the cloud. Users operate in on demand environments. Analysts don’t need to worry much about the heavy lifting associated with data integration. Today, the process is closer to “discover, identify and act.”
Fast-changing data in grocery means dynamic changes on shelf availability, new item introductions, promotions and supply chains. Achieving collaboration starts with notifications where key people discover a situation that needs to be addressed as soon as possible. Since challenges like out of stocks vary across regions, divisions, categories, products, stores and more, they need to identify precisely where the biggest challenges exist. Only then can the appropriate actions be put in place in support of addressing shopper needs.
The most progressive grocers are focused on the shopper through an optimized set of complex connections across all aspects of the supplier-retailer ecosystem. They are committed to reinventing their processes to discover when a problem occurs, identify exactly where they need to spend their time and putting a set of collaborative actions in place to ensure the shopper’s experience is as good as it can be.