Time and time again in our work with merchandising, category management, and supply chain leaders at Kroger, Roundy’s, and hundreds of consumer packaged goods (CPG) manufacturers, we have seen firsthand how strong retailer/supplier collaboration enables better category management and more successful new item introductions. Why? Because when trading partners collaborate together using the same data and retail analytics to achieve shared goals, they can work together more efficiently and effectively to solve problems and drive better results.
Here are some examples:
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- In 2012, during the initial launch of Tide Pods, with its innovative new single-use packet design, Procter & Gamble (P&G) was working hard to manufacture enough Tide Pods to give every shopper a chance to try the company’s new offering during the initial launch phase. P&G collaborated closely with its key US grocery trading partner to monitor actual daily store level sales and inventory rates and to prioritize shipments from warehouses to stores that were most at risk of running out. The collaboration helped P&G and its grocery partner minimize enterprise-wide out of stocks while maintaining service levels at or above 98.5%.
- One leading US branded cat food manufacturer worked with category managers at a national grocer to accelerate the delivery of six new items to store shelves during the initial eight-week period of intensive TV and print advertising and promotional trial offers. By using detailed daily store-level retail analytic reports to track authorizations, orders, shipments, inventory, and scanned sales for the new items in more than 2,400 stores, the team was able to identify and target individual stores where supply chain problems were preventing the new items from reaching shoppers. Four weeks into the launch process, more than 90% of stores were selling all six items, a dramatic acceleration of new item availability to shoppers relative to past new item introductions.
- Earlier this year, E. & J. Gallo Winery was able to prevent more than $600,000 in lost retail sales in just the first two weeks of the introduction of its Dark Horse wine brand. By collaborating with category management and supply chain leaders at their grocer partner to proactively identify and fix all potential problems, Gallo was able to avoid back-door rejections of the five new Dark Horse items by stores. This collaboration, which involved tracking the new item setup process and authorization status of the five SKUs across 80 distributors delivering to more than 1,200 grocery stores, allowed Gallo to establish Dark Horse as the fastest-growing wine brand in dollar sales after less than five months on the market.
What’s surprising about these examples is how seemingly simple and obvious these forms of grocer/supplier collaboration are. What grocer or supplier team wouldn’t want to work together during a new item launch to optimize the supply chain, reduce out of stocks, and ensure fast and ubiquitous shelf availability?
The challenge, of course, is achieving this at scale across thousands of items and stores while also tending to the ongoing demands of running a grocer business.
To build scale into their collaboration, some grocers are adopting collaboration platforms that automate the process of data sharing and provide trading partners with smarter retail analytic and predictive analytic tools that deliver smarter, forward-looking insight to drive more successful new item introductions. Market6 is happy to be part of that new approach to collaboration and to support our customers as they deliver a continuing stream of exceptionally successful new items to shoppers.