Optimizing performance with data-driven innovation
Manufacturers and retailers have always had a mutual dependency. Manufacturers need retailers to sell their products, and retailers need manufacturers to stock their shelves. In the old days, the burden of brand experience,
product positioning and sales performance primarily fell on retailers’ shoulders.
Most manufacturers did not control their own destiny. They kept their fingers crossed and accepted how things were being done as long as they hit their revenue targets.
Fast forward to today. A revolution in consumer behavior is the real story behind the headlines about the so-called retail apocalypse. A new retail model has emerged. Consumers are increasingly choosing digital commerce—whether marketplaces like Amazon or retailers like Walmart, Target, Best Buy and Nordstrom, or even click and collect grocers like Kroger—to research and purchase products. This is disrupting traditional channel dynamics. Digital shelves have become the place to tell brand stories and distribute, promote and sell products. This shift puts new pressure on the manufacturer-retailer relationship.
Digital commerce spectrum
The varying degrees of control
Limited control, little transparency, lost opportunity
Manufacturers have some insights into how their brands and products should be presented on digital shelves. But they don’t directly control the shopping experience. Retailers do.
Yet retailers are struggling to manage the needs of so many brands with limited resources and bandwidth. Most do not do enough testing at the brand level to make informed decisions about optimizing experiences. As a result, brand stories are lost on product pages that all look the same, and products and brands are not differentiated enough across the consumer journey.
With digital performance so critical to revenue generation and growth, standing on the sidelines is not an option for manufacturers. They need to know that their brand, products, content, messaging, advertising, UX—the whole digital marketplace experience—is resonating with consumers. They need to take back some control. Doing this means experimenting together with retailers. It’s a win-win.