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Why Collaborative E-Commerce Solutions are Essential for Retailers and Suppliers

Photograph: Category Management Association

In today’s hyper-competitive marketplace, e-commerce category leadership has become necessary to stay competitive and grow. That’s why e-commerce has become mission critical for consumer product retailers and suppliers. But most retailers and manufacturers are still far from optimizing e-commerce opportunities.

In response, the Category Management Association (CMA) agreed to sponsor the development of best practices and standards for e-commerce. The CMA, along with The Partnering Group (TPG), invited leading suppliers and retailers to participate, and together, they formed the E-Commerce Category Leadership (ECL) Board.

Why the need for collaboration between suppliers and retailers?

  • The e-commerce challenge is immense and requires significant expertise and investment.  
  • Their businesses are interdependent and rely on each other for success.
  • They share common goals and working together will be mutually beneficial.
     

Over the past year, the ECL Board met four times. Industry experts were interviewed and ECL tools from TPG were shared and leading practices discussed. TPG contributed approaches refined over 18 years of digital marketing and e-commerce. The findings were published in a report: E-Commerce Category Leadership—A New Approach to Retailer and Supplier Collaboration for Digital and E-Commerce Growth

Summary of Findings

The report defined six key areas where suppliers and retailers must collaborate:

Fundamental product content: This represents the first and most foundational

point of collaboration.

Impulse sales: Modern e-commerce sites and apps still lack a compelling way to    

drive impulse or un-planned product sales.

Search, SEO and algorithm tuning: Shoppers need to quickly and easily navigate websites to find what they need and check out.

Cross selling: The digital environment provides a perfect opportunity for cross selling complementary products to boost incremental sales.

Personalization, loyalty and subscription: E-commerce can help convert prospects into loyal customers.

Waste and labor cost reduction: E-Commerce business models need to be streamlined to reduce costs related to handling and delivery.

The report concludes that in order to tap into and solve for these opportunities, suppliers and retailers need the following:

1)  An agreed upon process
Retailers and suppliers collaborate more productively when there is clarity on the steps required, inputs and outputs and how to measure results.

2)  Reimagined categories

The shopping experience online is not “bound” by the physical constraints of the store. Suppliers and retailers must rethink categories and look for wider solutions.

3)  Data sharing in return for quality insights
Unlocking the value of massive amounts of data will require targeted data sharing, objectivity and new analytic skills for both parties.

4) Newrelationships

Relationships and collaborations may need to evolve into project-based roles involving more suppliers and tackling topics that cross categories.

The bottom line is that for real progress to be made, there needs be a focus and strong commitment to e-commerce collaboration between suppliers and retailers. This partnership will provide sufficient bandwidth and expertise for both parties to achieve their e-commerce goals.

The ECL Board will present and discuss its report in detail at the Category Management & Shopper Insights Conference in Las Vegas in February 2019. The participating retailers, manufacturers and solution providers will be on site and available to discuss the project, future initiatives and participation, as well as to open up doors for more collaborative discussions. For the first time, the report will be made available to the entire industry (until now, only CMA members have had access to the content). The report can be downloaded from CMA’s website.

This post is sponsored by Category Management Association

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