The Manufacturer-Retailer Relationship: Collaboration Breeds Success

teamwork collaboration rowing scull feature

Close collaboration drives a successful manufacturer-retailer relationship (credit: Matteo Vistocco on Unsplash)

The dynamics of the manufacturer-retailer relationship are complex and subject to constant power shifts. Where retailers often excel at customer loyalty, recognition and retention, manufacturers often control stock availability and product development. So then, both are reliant on each other for key aspects of the value chain.

As customers continue to demand innovative digital experiences and consistency across a growing number of channels, effective communication and collaboration is crucial. This is especially true for manufacturer-retailer relationships to thrive and support those experiences.

Benefits of a Strong Manufacturer-Retailer Relationship

When retailers and manufacturers collaborate effectively, shared demand insights can be used to develop more effective marketing campaigns targeting the right customers with the right products. Let’s say an athletic shoe manufacturer is working with a retailer to sell its newest sneakers. The manufacturer can share customer demographic data, as well as the types of shoes they’re most likely to buy. The retailer can use this information to create targeted campaigns and personalized recommendations that are more likely to generate sales.

Another benefit of a strong manufacturer-retailer relationship is improved customer service. When retailers have access to up-to-date product information from manufacturers, they can better answer customer questions and resolve issues. Returning to our athletic shoe example, a customer may ask the retailer for information on the size and fit of the newest sneaker, as well as stock availability and shipping estimates.

All of this information should be provided by the manufacturer so that agents on the phone or chat can quickly and accurately answer question. This not only ensures the customer is happy with their purchase, but it builds trust and loyalty for the future.

Lastly, a strong manufacturer-retailer relationship can lead to the innovative development of new products and services, providing both parties with a competitive edge. Let’s say that our shoe manufacturer is working with a retailer to develop a new line of women’s sneakers. The retailer can share insights about which kinds of sneakers have historically performed the best at different price points, and which features are most popular with their customers. In return, the manufacturer can provide exclusive access to their newest offering, and insights into the groundbreaking technology behind the shoe to use in promotional collateral.

Tips for Building a Strong Relationship 

There are many factors that determine the strength of the manufacturer-retailer relationship, but here are 4 key tips:

Establish a regular cadence of check-ins

Regular communication is key to maintaining a strong relationship. Determine a frequency that suits both parties’ needs and schedules – weekly, monthly or quarterly. Use these standing meetings to discuss ongoing projects, address concerns and provide updates. Prepare an agenda in advance to ensure that important topics are discussed, and keep records to refer back to later if needed. This open line of communication will help build trust and ensure that everyone is aligned.

Create a central source of truth for product information

Having a centralized system for product information is vital to avoid miscommunication and errors. This can be achieved through a Product Information Management (PIM) system or a shared database easily accessible to both parties. By ensuring that everyone has access to the right product information at the right time, you can minimize confusion and streamline processes.

But implementing a system where both parties can input and access product information is just the start. It’s equally important to maintain clear guidelines for data entry, and regularly review and update the system to reflect any changes or new products in order to ensure consistency.

Collaborate across every stage of the value chain

When manufacturers and retailers work together throughout the entire value chain, including product development, marketing, and customer service, both parties can better understand each other’s needs and work towards shared goals.

What does this look like in practice? Encourage joint planning sessions to discuss product development and marketing strategies, and share market insights and customer feedback to inform decision-making. Consider co-branding opportunities or joint promotional campaigns to leverage each other’s strengths. Maintain open lines of communication to address any issues promptly and find mutually beneficial solutions.

Collaborate and Communicate Early and Often 

Effective communication is essential for any relationship today, but is particularly important when it comes to building a strong manufacturer-retailer relationship. Investing in communication and collaboration early on ensures both parties are aligned on goals and strategies, new product testing and innovative technologies. They can also fully leverage customer insights and data to create compelling product experiences.

Kristin Naragon is Chief Strategy and Marketing Officer at Akeneo