Trading Partner Collaboration Key to Retailer Success: Study
CHICAGO - Most retailers view collaboration with their trading partners as key to the success of their businesses, according to a joint survey released yesterday from global strategy and technology consulting firm Booz Allen Hamilton.
The "Promotion Collaboration Survey," conducted in partnership with the Trade Promotion Management Associates (TPMA) and underwritten by consumer demand management solutions provider Demandtec, San Carlos, Calif., was presented at the TPMA Annual Conference here, and provided insights into the way retailers and manufacturers view the process of creating and executing promotions and related merchandising activities.
The majority of survey respondents said that they believe collaboration is very important to their future success. Among retailers, 92 percent said collaboration was "very important" and 8 percent said it was "important." Manufacturers rated collaboration as "very important" 56 percent of the time, and "important" 39 percent of the time.
Key benefits of collaboration cited by both manufacturers and retailers included not only ROI and effective promotions, but also revenue growth and more efficient planning. At the top of the list is "more effective and efficient planning" was cited by 83 percent of retailers and 68 percent of manufacturers.
"Revenue growth" was reported by 75 percent of retailers and 53 percent of manufacturers, while "reduced out of stocks" was claimed by 58 percent of retailers and 34 percent of manufacturers.
Fifty-eight percent of retailers experienced "share growth" due to collaboration, as did 37 percent of manufacturers. "More effective promotions" and "more efficient new product introductions" were reported by half of both retailer and manufacturer respondents.
"This industry research confirms that collaborative planning can deliver significant benefits to both retailers and manufacturers through better strategic pricing, product assortment and promotion optimization decisions," said Armen Najarian, director of product marketing at DemandTec. "As more retailers and manufacturers embrace collaborative tools and processes, we see a network effect of companies working together to unlock new levels of business value."
The survey, authored by industry research specialist Coogan & Partners, included input from many of the world's leading retailers and manufacturers, according to Demandtec. These companies together represent 40 percent and 55 percent of domestic grocery volume, respectively. The research also uncovered best practices for how the industry can work together to improve the impact of retail-focused merchandising and marketing efforts both at the shelf and outside of the store.
The survey was conducted in partnership with the TPMA as a Web-based questionnaire. The respondent set included 54 qualified respondents from retailers and consumer packaged goods manufacturers representing 40 percent and 55 percent of domestic U.S. grocery volume, respectively. Coogan & Partners conducted the survey during July and August 2007, drawing on members of the TPMA, customers of DemandTec, and clients of Booz Allen Hamilton.
The "Promotion Collaboration Survey," conducted in partnership with the Trade Promotion Management Associates (TPMA) and underwritten by consumer demand management solutions provider Demandtec, San Carlos, Calif., was presented at the TPMA Annual Conference here, and provided insights into the way retailers and manufacturers view the process of creating and executing promotions and related merchandising activities.
The majority of survey respondents said that they believe collaboration is very important to their future success. Among retailers, 92 percent said collaboration was "very important" and 8 percent said it was "important." Manufacturers rated collaboration as "very important" 56 percent of the time, and "important" 39 percent of the time.
Key benefits of collaboration cited by both manufacturers and retailers included not only ROI and effective promotions, but also revenue growth and more efficient planning. At the top of the list is "more effective and efficient planning" was cited by 83 percent of retailers and 68 percent of manufacturers.
"Revenue growth" was reported by 75 percent of retailers and 53 percent of manufacturers, while "reduced out of stocks" was claimed by 58 percent of retailers and 34 percent of manufacturers.
Fifty-eight percent of retailers experienced "share growth" due to collaboration, as did 37 percent of manufacturers. "More effective promotions" and "more efficient new product introductions" were reported by half of both retailer and manufacturer respondents.
"This industry research confirms that collaborative planning can deliver significant benefits to both retailers and manufacturers through better strategic pricing, product assortment and promotion optimization decisions," said Armen Najarian, director of product marketing at DemandTec. "As more retailers and manufacturers embrace collaborative tools and processes, we see a network effect of companies working together to unlock new levels of business value."
The survey, authored by industry research specialist Coogan & Partners, included input from many of the world's leading retailers and manufacturers, according to Demandtec. These companies together represent 40 percent and 55 percent of domestic grocery volume, respectively. The research also uncovered best practices for how the industry can work together to improve the impact of retail-focused merchandising and marketing efforts both at the shelf and outside of the store.
The survey was conducted in partnership with the TPMA as a Web-based questionnaire. The respondent set included 54 qualified respondents from retailers and consumer packaged goods manufacturers representing 40 percent and 55 percent of domestic U.S. grocery volume, respectively. Coogan & Partners conducted the survey during July and August 2007, drawing on members of the TPMA, customers of DemandTec, and clients of Booz Allen Hamilton.