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Description

A tactical approach to collaboration that maintains an adversarial, sales-oriented relationship where both parties develop initiatives and goals in isolation

A strategic approach to collaboration that incorporates a cultural change and focuses on creating win/win situations based upon shopper preferences

Insights

Driven by pre-determined programs and organizational goals and devel- oped in isolation

Created to understand shoppers and develop in-store programs and often developed in conjunction with partner

Program Development

Developed by one side to meet its individual needs

Jointly developed to meet both organizations’ needs

Execution Resources

Partner brings few resources for execution

Both parties commit to meeting execution goals

Data Transparency

Retailer provides little access to data (e.g., loyalty card data)

Retailer provides data to improve insights and program development

Impact

Fosters mistrust and provides oppor- tunities for competitors to develop closer ties

Grows both manufacturer’s and retailer’s business and improves the relationship

SECTION TWO

tegic and cultural change focused on the shopper’s preferences and a commitment to a partner’s best interest. Manufacturers striving for committed collaboration bring tailored insights that are specific to the retailer’s business and customer segmentation and work jointly with the retailer to develop shopper marketing programs that meet both organizations’ needs. The manufacturer’s motivation is to help the retailer generate top line category growth and improve their own sales in the process. Retailers act as committed collaborators when they share data and resources, allow the manufacturer a voice in the final program design, live up to execution agreements and help with post-program analysis.

The most valuable long-term relationships can only be established if both sides can cred- ibly demonstrate that they are genuine in their intentions. They can do so by dedicating resources, understanding their partners’ business and goals, becoming more transparent with data and consistently executing against promises.

Transactional vs. Committed Collaboration

Transactional

Committed

SECTION TWO

Deep understanding of partners and careful communication builds genuine commitment

Safeway Demonstrations Commitment through Collaboration

Successful shopper marketing collaboration depends on manufacturers developing a strong understanding of the partner’s business initiatives, customers, and issues. Safeway is making it easier for manufacturers to ac- complish these by collaborating with them in the areas of customer segments, customer marketing, frequent shopper card data and internal processes.

While the day-to-day transactional sales channel is a key component of manufacturer interaction, Safeway has developed a larger, more holistic approach to communications.

  • Strategic Industry Participation – Safeway has agreed to participate in manufacturer and retailer industry panels such as the GMA/FMI sponsored New Ways of Working Together initiative to foster open communications with manufacturers.

  • Manufacturer Meetings – Safeway “calls in” manufacturers and holds large group meetings to inform them of changes in strategic direction, segmentation, and business processes

  • Optura Portal – Safeway provides free pre-generated sales data reports to give manufacturers an op- portunity to develop new insights and a provide a baseline for discussions

  • Internal Channels – Safeway has developed internal lines of communication that ensure manufac- turer insights are shared and strategically incorporated into other relevant parts of the organization.

Internal and manufacturer-completed surveys are another key element of Safeway’s plan to improve communica- tion and collaboration. Safeway uses these surveys to identify the pain points of working with manufacturers and on ways to improve business processes.

The adoption of a strategic communication system has improved Safeway’s shopper marketing efforts and en- hanced the shopper marketing maturity of its manufacturer partners. The company has witnessed improvement in the number and quality of shopper marketing programs being offered by manufacturers. By helping educate and advance the overall industry, Safeway can better identify and select the campaigns that will be the most fruitful and profitable.

Source: 2008 GMA/Deloitte Shopper Marketing Study Interview

The Right Partners

Since each retailer and manufacturer has different levels of shopper marketing maturity, strategic value, financial value, and openness to committed collaboration, forward thinking companies assess each potential partner and customize their collaborative efforts accord- ingly - like selecting and weighting investments in a portfolio.

Companies should assess the individual value of each potential partner based on two axes:

  • 1.

    Strategic value of the partner

    • Financial performance

    • Future strategic importance

    • Alignment with company strategy

    • Shopper marketing maturity (e.g., dedicated resources, store-level execution capabilities, consistency, sophistication of insights)

  • 2.

    Ability to collaborate

    • Tangible interest in collaboration (e.g., sharing of data, alignment of the banner

goals with brand goals, willingness to invest)

  • Resources committed to collaboration and internal alignment of incentives

  • Potential for future collaboration

2

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