how can manufacturers and retailers resolve the digital collaboration conundrum?

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.


How can retailers and manufacturers work together to conquer this challenge?


The first step is to identify the obstacles of collaboration standing in the way of their digital journey.


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.


OBSTACLE #2

Lack of trusted data

A lack of trusted data on

products, pricing, competitors

and purchases often holds back

effective collaboration.


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.


OBSTACLE #4

Shallow customer

knowledge

While retailers collect a great

deal of data about their

customers, they still do not

know enough about them.


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.


So, how can manufacturers and retailers overcome these obstacles and solve the digital collaboration conundrum?


Retailers and manufacturers must align on broad strategic objectives and commit to a set of priorities focused on achieving these objectives.

Align strategic objectives


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


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


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


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


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


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.


Collaboration between retailers and manufacturers is the secret to success in today’s omni-channel digital world.


ANY QUESTIONS?

Learn more about how to

solve your own digital

collaboration conundrum at:

Accenture.com/digitalcollaboration

how can manufacturers and retailers resolve the digital collaboration conundrum?

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