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By Tony Agresta, senior director of marketing, Market6
This post is the first in a three-part series on Collaboration 2.0 for retailers and suppliers. Source content for these posts is from FMI Connect 2015, specifically a session entitled “Collaboration 2.0. A Next Generation Model of Better, Consumer-Focused Partnership,” moderated by FMI’s Pat Walsh.
I walked into a Tuesday morning breakout session at FMI Connect 2015 and noticed about 20 people in the room 20 minutes before the start of the event. Attendees continued to steadily flow in. Just prior to session kickoff, an estimated 100 to 120 filled the room – at 8 a.m.! After that, I didn’t look back from my perch in row three. My eyes were glued to a stellar panel of experts spanning retail, supply, technology and analytics.
Pat Walsh from FMI moderated “Collaboration 2.0. A Next Generation Model of Better, Consumer-Focused Partnership,” backed by a panel of veterans including Mel Bomprezzi, VP of grocery, Natural Foods, and multi-cultural merchandising at the Kroger Co.; Colleen Flaherty, VP/GM of the Kroger Team at Kraft Foods; Geoff Kuzio, VP of the Kroger Team for the Campbell Soup Co.; and Jerry Stephens, VP of business development at Market6.
It was clear from the outset that momentum is building around this topic as suppliers and retailers push toward joint business planning nirvana. As the session kicked into gear, it also became clear that every plan, every step in the analysis, every promotion on which suppliers and retailers collaborate, will all need to be focused around the customer.
With more than 127 years of experience spanning supply chain, grocery retail, multi-channel marketing, technology and analytics, this panel delivered real insights on how collaboration works.
Facts Describe the Challenge Ahead
Collaboration 2.0 has the potential to transform how retailers and suppliers work together in support of the customer. This session started with a summary of metrics that can be improved upon.
- $634 billion lost to out of stocks annually
- OOS represent 8-10 percent of everyday shelf items
- OOS represent 13-15 percent of items on promotion
- 67 percent of trade promotions lose money
- 85 percent of new items introduced to the market fail
- 9 percent of consumers shop in more than one grocery store.
Sound dismal? Well, it’s not. By taking collaboration to the next level, a sea change is occurring and the ultimate beneficiary is the consumer. Sure, others win as the connected chain of players synchronize, communicate, budget, plan, ship, stock and promote. But make no mistake about it – the consumer is the ultimate winner and, in turn, a positive financial ripple radiates back through all aspects of supply and retail.