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WASHINGTON -- Half of current customization programs in the grocery industry fail to create net benefits for retailers and manufacturers, according to a study released this week at the Grocery Manufacturers Association Merchandising, Sales, and Marketing (MSM) conference in West Palm Beach, Fla. To fix this problem, product and service customization initiatives have to be more systematic, analytical, and collaborative, according to the study, which was conducted by Booz Allen Hamilton for GMA.
The key to righting the ship is "shelf-centered collaboration." Said Booz Allen Hamilton v.p. Rich Kauffeld, "Companies looking to improve customization success need to focus efforts on strategic partners, work collaboratively to understand end-to-end economics, and sustain an effective dialogue about program performance and issues." (Story continues below.)
Kauffeld added the study showed that "manufacturers working together with retail partners to develop shelf-forward insights for increasing demand, while also collaborating to enable the program from a shelf-back supply perspective, achieved much higher levels of program success."
"The study demonstrates the importance of calculated and efficient customization processes for our industry," said GMA senior director of industry affairs Karin Croft. "Given that 50 percent of customization programs do not meet manufacturer and retailer expectations, this report highlights important considerations that they must take into account in deciding when and how to customize products and services."
The analysis, "Creating Value through Customization," was presented at the GMA event by an expert panel, moderated by Kauffeld. Participants were Skip Aldridge, e.v.p. and chief customer officer of Pharmavite, LLC; Sandy Grimes, v.p. of sales at Johnson & Johnson US Consumer & Personal Care Cos.; Joe Hurley, director of supply chain at Giant Eagle, Inc.; and Brett Paladino, associate directory of customer supply chain development for Kraft Foods, Inc.
"Custom displays do drive share, yet at what cost?" asked Grimes at the session. "In an effort to improve overall display effectiveness and efficiencies at Johnson & Johnson, we have worked on a well-defined cross-functional roadmap that includes very specific deliverables and metrics. We feel this approach will help us to strengthen our overall process, and through the increased analytics ensure progress towards display effectiveness and efficiency."
Case study data found opportunities for manufacturers and retailers to share key performance indicators, improve metrics, encourage collaboration and communications, and effectively share budgetary goals and compliance efforts.
To download a copy of the report, go to www.gmabrands.com.
In other GMA news, the group teamed with members of the Coalition Against Piracy and Counterfeiting (CACP) yesterday to introduce the CACP's No Trade in Fakes Brand Integrity Toolkit, at the National Chamber Foundation's Third Annual Anti-Counterfeiting and Piracy Summit. GMA heads the coalition's No Trade in Fakes Task Force, and led the effort to develop the toolkit, which was presented to U.S. Secretary of Commerce Carlos Gutierrez at the summit.
The toolkit expands on the broad principles for improving the security of the business supply chain that were developed by the coalition last year. It discusses many innovative ways companies are protecting their supply chains from piracy and counterfeiting, such as verification of legitimate trading partners, better management of production waste and damaged or unusable inventory, improved monitoring of the retail market, and better cooperation with law enforcement.