IRI, Chicago, outlined the significant benefits that consumer packaged goods (CPG) manufacturers and retailers reap through the use of collaborative technology platforms.
According to the report, “Pitch Perfect: Orchestrating the Collaboration Imperative,” CPG companies that leverage advanced technology are transforming the retailer-supplier relationship from store-centric to customer-centric, achieving a singular view of market challenges and opportunities to provide positive customer experiences that strengthen customer loyalty and grow customer lifetime value.
“CPG retailers and suppliers have clearly recognized the need to collaborate to win in today’s challenging marketplace,” says Brad Shelton, president of Collaborative Gateway Solutions for IRI. “Three-quarters of manufacturers that are leveraging our gateways are using the collaborative platforms to better communicate with their retailer partners, and are finding retailers very eager to act on their insights. The results of this shift are remarkable and clearly demonstrated by outsized growth.”
In the report, IRI outlines that CPG retailers and manufacturers leveraging advanced collaboration technology experienced accelerated growth along three key growth levers:
- Process improvements. When retailers and suppliers use collaboration technology platforms to achieve and maintain a more customer-centric view of the marketplace through a shared portal, the partners can identify and implement process improvements to drive growth. This report provides examples of the ways retailers and suppliers use these tools to improve coordination and streamline processes around new product launches, on-shelf availability and demand forecasting.
- Cost reduction. As the CPG industry continues to chase wider profit margins, effective cost management is critical for success. Technology-enabled collaborative portals linking suppliers, distribution centers and the retail store allow for improved alignment among purchase orders, shipments and inventory, which may unlock enhanced supply chain efficiencies and allow retailers to capture revenues previously lost due to out-of-stocks.
- Revenue and margin enhancement. Maximizing sales and margins in CPG depends on retailers’ customer-centricity, and their ability to leverage data to inform the proper assortment and presentation at the point of sale. Advanced collaboration technology allows retailers to combine their point-of-sale insights capabilities with their suppliers’ product development and marketing expertise to produce creative and curated assortments that resonate with highest-value customers and support revenue and margin enhancement. In fact, some companies are outperforming the market by up to four percentage points through this new level of collaboration.
“The IRI Retail Collaborative Gateways allow fast and secure integration of data sets from retailers, CPG partners and third-party suppliers, and provide consistently aligned and fully integrated data through a single point of access,” adds Shelton. “It’s game-changing technology that paves the way for quick and agile decision-making at a time when speed and agility are table stakes. Those that can’t keep up will be left in the dust.”