How can manufacturers and retailers resolve the digital collaboration conundrum?

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With increasing customer expectations and the complexity of omni-channel, profitable growth for retailers and manufacturers depends on digital collaboration.

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How can manufacturers and retailers resolve the digital collaboration conundrum?

  1. 1. How can manufacturers and retailers resolve the digital collaboration conundrum?
  2. 2. 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.
  3. 3. Consumer expectations around convenience, cost and experience are ever-increasing and challenge retailers more than ever. Copyright © 2016 Accenture. All rights reserved.
  4. 4. How can retailers and manufacturers work together to conquer this challenge? Copyright © 2016 Accenture. All rights reserved.
  5. 5. The first step is to identify the obstacles of collaboration standing in the way of their digital journey. Copyright © 2016 Accenture. All rights reserved.
  6. 6. 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. Copyright © 2016 Accenture. All rights reserved.
  7. 7. OBSTACLE #2 Lack of trusted data A lack of trusted data on products, pricing, competitors and purchases often holds back effective collaboration. Copyright © 2016 Accenture. All rights reserved.
  8. 8. 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. Copyright © 2016 Accenture. All rights reserved.
  9. 9. OBSTACLE #4 Shallow customer knowledge While retailers collect a great deal of data about their customers, they still do not know enough about them. Copyright © 2016 Accenture. All rights reserved.
  10. 10. 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.
  11. 11. 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. Copyright © 2016 Accenture. All rights reserved.
  12. 12. So, how can manufacturers and retailers overcome these obstacles and solve the digital collaboration conundrum? Copyright © 2016 Accenture. All rights reserved.
  13. 13. Retailers and manufacturers must align on broad strategic objectives and commit to a set of priorities focused on achieving these objectives. Align strategic objectives Copyright © 2016 Accenture. All rights reserved.
  14. 14. 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 Copyright © 2016 Accenture. All rights reserved.
  15. 15. 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 Copyright © 2016 Accenture. All rights reserved.
  16. 16. 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 Copyright © 2016 Accenture. All rights reserved.
  17. 17. 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 Copyright © 2016 Accenture. All rights reserved.
  18. 18. 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 Copyright © 2016 Accenture. All rights reserved.
  19. 19. 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.
  20. 20. Copyright © 2016 Accenture. All rights reserved. Collaboration between retailers and manufacturers is the secret to success in today’s omni-channel digital world.
  21. 21. Copyright © 2016 Accenture. All rights reserved. ANY QUESTIONS? Learn more about how to solve your own digital collaboration conundrum at: Accenture.com/digitalcollaboration

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