Retailers, Manufacturers Don't See Eye to Eye

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Retailers, Manufacturers Don't See Eye to Eye

By Barbara Grondin Francella

ATLANTA -- There is significant disconnect between what retailers and manufacturers say they need from each other and what they actually get, according to a recent survey by Miller Zell, a retail consulting firm based here.

Retailers and manufacturers believe they understand their own businesses, but neither thinks the other understands their partner's businesses very well, according to the survey of more than 50 retail and manufacturer executives. Respondents were asked to rank various aspects of the retailer/supplier relationship on a scale of one to 10 (1 being poorest/lowest).

"Though 'partnership' has long been considered a value-add, manufacturers and retailers are now seeing it as a strategic imperative for sustainable growth," the report concluded. "Even so, both have difficulty pinpointing strategies that will lead the way to building stronger and mutually beneficial business strategies."

Nearly 70 percent of the retailers and 55 percent of the manufacturers surveyed ranked the other as only "somewhat familiar" with the other's business challenges. Three-fourths of the retailers and nearly 70 percent of the manufacturers say the other is "somewhat familiar" or "not familiar" with the shopper.

There was a 56-point differential between how knowledgeable retailers and manufacturers say their partners are in regard to retail marketing strategy and how knowledgeable they expect them to be.

"High expectations exist around the need for shopper marketing and retail strategy expertise," the report noted. "Both parties see this discipline as a critical component for sustainability, yet relay the required higher knowledge level doesn’t not exist with current partners."

While 100 percent of the retailers and manufacturers said they want their partners involved in developing in-store marketing initiatives, only 22 percent scored the other party with an eight or above on their involvement level.

Nearly 60 percent of retailers and suppliers said the other collaborates with them only "somewhat" or "not at all."

"As the economic downturn continues, retailers and manufacturers will need to find ways to overcome the roadblocks that create barriers to collaborative partnerships," the report concluded. "This will be essential in the pursuit of identifying meaningful and effective strategies that will help [them] maintain engagement with today's shopper."