In Promotion Collaboration, Trust Isn't the Big Problem

A relative few retailers and manufacturers will argue the point that there's an industry-wide need for better collaboration on promotion planning. And so a better understanding of what stands in the way of this goal should certainly be near the top of their "to-do" lists, especially in an era when promotion effectiveness is so critical to success.

Addressing trade promotion optimization and collaboration was the objective of research jointly sponsored by IBM Smarter Commerce and Booz Allen Hamilton, in partnership with Trade Promotion Management Associates. The insights derived from the study imply ways that trade partners can work together more effectively, thus improving retail-focused merchandising and marketing.

Distrust between retailers and manufacturers as the main impediment to collaboration is a wide-held industry truism. But the study results seriously undermine that notion. While trust remains a key factor in collaboration effectiveness, it is relatively insignificant compared to other barriers to promotion collaboration as seen by retailers and manufacturers. The top concern, cited by 75 percent of participants, was lack of data consistency — in hierarchies, formats, data attributes, etc.  Failure in getting timely data and lack of joint KPIs came next in ranking. Inappropriate tools, misaligned/lack of defined objectives, and lack of a process were also cited by at least half of those surveyed. All of these factors were considered to be greater barriers to collaboration than a lack of trust.

Some interesting insights also came to the surface when retailers and manufacturers were asked to rate the how their vendor partners were doing with a number of skills needed to collaborate competently. Participants were asked to rate the importance of each skill vs. the effectiveness with which their trading partners handled it. Retailers and manufacturers shared concerns in one area — "ability to accurately forecast consumer and warehouse demand." Both saw this skill as very important to the collaborative relationship and yet saw significant shortcomings in their partners' capabilities.

FOR MANY MORE INSIGHTS ON WAYS TO IMPROVE PROMOTION COLLABORATION, DOWNLOAD THIS WHITEPAPER...

Submit this form for an instant download of the whitepaper, Promotion Collaboration - Five Steps to Success, courtesy of IBM Smarter Commerce.