We’re On the Same Team Part Two: Accountability in Collaboration

October 22, 2012

Manufacturers and retailers have been struggling disparately to move forward to a sustainable future, to no avail. In my last post (click to read), I compared their marketing efforts to the oars of a rowboat - ineffectively sweeping through the water one at a time, instead of simultaneously as they should.

They can come into an effective rhythm that will create a workable model of partnership, as I discussed, but this model can only be maintained when it is centered on accountability - something essential to the long-term success of manufacturer-retailer relationships. Think about it, if a manufacturer takes the time and effort to put policies in place and then ignores violators of its policies, the policies become useless. Or, if a retailer agrees to follow said policies and then breaks them or neglects to report unsanctioned or insidious retailer behavior, what good is their commitment for collaboration in the first place?

Accountability is the missing ingredient here, and is necessary for successful collaboration between manufacturer and retailer in this rapidly changing industry.

Manufacturers are accountable to their retailer partners in the following ways:
• Brand and Content Management: Limiting the use and distribution of their brand to only their sanctioned retail partners.
• Pricing Parity: Balancing the variation in Internet and brick-and-mortar advertised pricing for each of their products to create parity on all retail channels.
• Governance and Enforcement: Monitoring and governing their content (images, product descriptions, messaging, and more), products, and the fair pricing of their products to ensure security and transparency in the marketplace.

Likewise, retailers must play a role in their collaboration with manufacturers:
• Transparency to Customers: Promoting the brand names of their manufacturer partners' products on the showroom floor (Consumers can find this information online anyway - almost immediately - and this level of transparency builds trust with prospective customers).
• Policy Compliance: Upholding and supporting policies (pricing, content, etc.) set forth by their manufacturer partners. It's for the retailer's own benefit.
• Exposure of Offenders: When violators of manufacturers' policies are recognized or suspected, retailers must notify that manufacturer so that they can put a stop to shortsighted and harmful retailer behavior.

If any or all of these measures of accountability are neglected, the entire system of partnership basically falls apart. Retailers and manufacturers alike must work together and be accountable to one another in an integrated business model, in order to maintain its effectiveness toward a successful future for our industry.

Posted by Barry Abraham on October 22, 2012 | Comments (2)

Industries: Furniture Retailing

November 7, 2012

In response to: We’re On the Same Team Part Two: Accountability in Collaboration
Barry Abraham commented:

Jon, thanks for the comment - I love that we have a conversation going on here. When I say manufacturers and retailers are struggling disparately, I mean they are not working together as they should and could be. There is definitely some overlap in the struggles of manufacturers and retailers, and there are also unique and varied struggles - that was not the topic of my post though, so I'll leave it for another day.
To answer your second question, all you have to do is look at the retail stores that are closing right and left. The retailer's practice of removing the brand labels from products has made a manufacturer's name meaningless to the customer. They have ceased to equate the brand's name with quality, and they simply showroom and find a cheaper version online. It undermines the whole system.

October 29, 2012

In response to: We’re On the Same Team Part Two: Accountability in Collaboration
jon commented:

when you say manufacturers and retailers have been struggling disparately, do you mean that the struggles of manufacturers are dissimilar from those of retailers or do you mean they are unique and varied among both manufacturers and retailers? i think this point requires greater explication.

what evidence is there to support the claim that failure to promote brand names on a showroom floor causes the entire system of partnership between manufacturers and retailers to basically fall apart?