The transformative impact of collaboration between retailers and their supplier partners is undeniable. In today’s competitive market, in which consumer expectations are higher than ever, stronger collaborations have gone from “nice to have” to essential.
To better understand this new era of collaboration, we spoke with NIQ’s Michael McLaughlin, President of International Retail, and Petros Petropoulos, SVP North America Retail Strategic Initiatives. Here, they address many of the questions retailers routinely ask us.
Q: How can retailers and suppliers make their relationships more collaborative?
McLaughlin: Today’s consumers have more control—and more expectations—when it comes to their shopping experience. It’s much more difficult for consumer packaged goods (CPG) and Tech & Durables (T&D) retailers to capture and maintain their loyalty.
At NIQ, we subscribe to the “collaboration for success” or “win-win-win” model to tackle this challenge. The goal is to create a better total experience for the three main stakeholders in the retail golden triangle: retailers, suppliers, and consumers. It comes down to retailers and suppliers working smarter together and aligning priorities around a shared view of their market and business activities.
Retailers have the data they need to understand their consumers, but to really grow, they need to offer suppliers the right insights to command their joint customers’ attention. With a collaborative approach—and the right tools and data in place to support it—retailers win, suppliers win, and most importantly, consumers win.
Petropoulos: We know the need for collaboration feels urgent at the moment: Retailers are serious about getting value out of their data to boost their bottom lines. But we also know that legacy collaboration programs leave something to be desired. Many don’t fully live up to their promise, and some are even seen as imposing a ‘‘tax” on suppliers. Capabilities for insights sharing and ROI measurement are inconsistent at best.
But the retailers we’ve seen successfully update their programs make focused efforts to evolve their relationships with their data and supplier partners, which ultimately improves the relationship with consumers.
Technology isn’t the only key element for success, however. Retailers and their platform providers must put in place the right processes and accountabilities so that suppliers have the opportunity to scale the number of customer-first insights and recommendations that are brought in to category managers and retail buyers. When these parties are truly collaborating about what is best for the category and customer, when the data and insights are trusted and aligned—this is when the promise of collaboration and monetization is maximized.
At NIQ, we try to implement this philosophy across different use cases and provide the tools for collaboration across supply chain, promotions, category and customer analytics, and more.
“When these parties are truly collaborating about what is best for the category and customer, when the data and insights are trusted and aligned—this is when the promise of collaboration and monetization is maximized.“
—Petros Petropoulos, SVP North America Retail Strategic Initiatives, NIQ
Q: What role does technology play in enhancing collaboration between retailers and suppliers?
McLaughlin: Adopting a platform that expands the use cases for collaboration is an important differentiator among retailers that successfully monetize the wealth of data at their disposal.
Another key differentiator of successful programs is sharing third-party market data with supplier partners. Offering supplier partners a full view of the landscape is a game changer—and not something all retailers are providing.
Petropoulos: The third basic tenet of a successful program is the ability to “close the loop” and measure the ROI and business value of your activations with suppliers. Successful collaboration programs do the ongoing work of learning and optimizing—work that their competition, in most cases, doesn’t efficiently do.
Q: Why should retailers share more data and insights with their supplier partners?
Petropoulos: As a CPG retailer, sharing insights with your supplier is crucial for a few reasons. It opens new revenue streams through media and data monetization, potentially adding significantly to your bottom line.
It also positions you as a premium marketing partner, attracting increased investment from suppliers and increasing your marketing budget.
This collaboration can lead to better decisions for the customer as they find the right products for them—leading to a 2% to 3% increase in retail sales. This is a win for the consumer, the retailer, and the supplier.
McLaughlin: A practical example of this is a drugstore retailer that worked with NIQ to improve its relationship with its supplier. This drug store chain, which has locations throughout Europe and the Middle East, used the NIQ Activate platform to share insights into custom purchase history and preferences, enabling suppliers to optimize their campaigns and product launches.
This collaboration led to better results for suppliers and increased joint marketing activities, and ultimately, it boosted the retailer’s success. In other words: Data sharing and collaboration increased supplier funding, changing the conversation to focus on the joint benefits instead of rationalizations for those activities.
Data sharing helped shift the focus of conversations, and ultimately, the relationship, to mutual benefits. This seamless data sharing improved both supplier and retailer outcomes—and gave customers the level of personalization they’ve come to expect.
“Data sharing helped shift the focus of conversations, and ultimately, the relationship, to mutual benefits. This seamless data sharing improved both supplier and retailer outcomes—and gave customers the level of personalization they’ve come to expect.”
—Michael McLaughlin, President of International Retail, NIQ
Q: How can stronger collaboration contribute to retailers’ personalization offers?
Petropoulos: In today’s competitive landscape, the success of personalized offers hinges not just on advanced technology, but also on the strength of collaboration between retailers and suppliers. Launching the right offer at the right time to the right customer requires seamless alignment.
When you as a retailer have responsive, AI-powered technology that’s providing a shared view of activities and shared analytics, you can bring your suppliers into the fold. When you share insights on performance of personalization campaigns, your suppliers can see real-time opportunities and associated risks—and collaborate on campaigns that work for everyone.
McLaughlin: We’ve seen retail clients utilize NIQ Activate for this collaborative approach to personalized offers. They involved their brands early in the campaign planning process with access to insights on customers’ behaviors and preferences.
The suppliers not only took an active part in the personalization campaigns, but they were also able to use the tool to truly see their impact and consistently evaluate their ROI.
Q: What best practices would you recommend to retailers looking to scale their partnerships most effectively?
McLaughlin: To effectively scale partnerships, retailers should begin by aligning on clear objectives with their suppliers and ensure both parties share a common vision. Utilizing data and analytics is key, as it enables retailers to make informed decisions aligned with their suppliers and refine strategies for mutual success.
Furthermore, focusing on customer experience through personalization can help enhance the value of these partnerships. Finally, flexibility, innovation, and agility are critical, allowing both sides to adapt to the fast-changing retail landscape and ensuring they remain relevant and beneficial over time.
Ensuring your win-win-win
The future of retail depends on deep, data-driven collaboration between retailers and their supplier partners. In 2024, traditional approaches won’t suffice in meeting the demands of increasingly selective consumers.
NIQ is leading the charge in modernizing retail-supplier collaboration practices. With our unmatched datasets and NIQ Activate platform, we’re empowering retailers and suppliers to work together like never before. From personalized marketing strategies to optimized supply chain management, our solutions enable partners to unlock untapped potential and drive tangible results.
By investing in the right tools, like NIQ Activate, retailers can create a true win-win-win scenario, ensuring success for themselves, their supplier partners, and their consumers.
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