Retailers and manufacturers are inextricably dependent on each other for success.
Ultimately, they share the common challenge of adapting to changing shopper habits and expectations, which is putting stress on traditional routes to growth, like sales and promotional tactics. It’s also forcing organizations on both sides to completely rethink how they serve shoppers and engage their partners.
Part of the problem may be that manufacturers have little control over the retail environment and can’t manage the brand experience at the point of sale. Instead, they rely heavily on advertising to convey their message and influence brand perception. For retailers, new competition means increased pressure to provide superior experiences and value in stores. According to McKinsey, as much as one fifth of consumer spending has shifted toward online-only e-Tailers, hard discounters and club stores, and traditional retailers need to provide unique value that will earn an in-person visit.
Clearly, manufacturers and retailers could be doing more to support each other. Both parties stand to benefit from closer collaboration, but with different objectives and, often, competing agendas, collaboration is easier said than done. The conversation (between retailers and manufacturers) tends to be very tactical and operational; the customer is not at the table. A more enlightened approach recognizes that both sides win when you discover the uniquely differentiated value that can be delivered together.
What retailers and manufacturers share in common is the need to understand shoppers, improve the retail experience, and grow sales. Which is why shoppers themselves are an essential ingredient in helping organizations collaborate, understand the shared value they can provide, and develop new solutions to meet savvy consumers’ expectations.
The Customer-Inspired Solution
Candy maker MARS found themselves with a challenge: to reverse declining sales for M&M’s, the world’s largest chocolate brand, at Walmart, the world’s largest retailer. They knew the solution had to elicit shoppers’ emotions and connect them to the M&M’s brand in a way that was fun and relevant to their lives.
The most important partner in this quest, as it turned out, was consumers themselves. Consumers are the glue that binds retailers and manufacturers together. Achieving a fundamental understanding of their lives — not just the moments where our brand intersects with them — would bring fresh perspectives to an in-store strategy, and align all partners around common purpose.
With that in mind, we facilitated co-creation and innovation workshops with consumers, MARS product and marketing leaders, agency partners, and the retailer stakeholders. Everyone came together in one place to learn and build upon each other’s ideas. By empowering consumers to think not as shoppers but as brand consultants, giving them defined parameters within which to ideate, strategize, and design solutions, the team was able to conceptualize a new shopper-focused platform.
The sessions revealed an important truth: people, moms in particular, wanted to spend more time at home together as a family, without spending a lot of money. Pairing M&M’s with a social form of family entertainment, like board games, could be a fun and affordable way for families to connect with each other away from their screens and electronic gadgets. This insight became the anchor for the MARS/Walmart strategy.
In partnership with Hasbro, MARS launched a multi-channel campaign dubbed the “Big Night In.” It encouraged families to stay home for a low-cost, low-tech night together, complete with Monopoly and Jenga to play and, of course, M&M’s to treat themselves with. The campaign was a dramatic success. The theme of saving money while spending quality time with family really resonated with shoppers. They shared ideas and #GameNightIn experiences across social media, resulting in millions of impressions. M&M’s sales quickly grew, MARS saw 98% sell-through rates, with an 11% increase in overall candy category share for Walmart.
The Opportunity: Alignment Around Shared Purpose
Manufacturers and retailers suffer similar pain points. The retail landscape is constantly evolving, consumers have more choices than ever before, and the marketplace is oversaturated. They have to continuously find new ways to excite and delight in a competitive marketplace with limited shelf space. Fighting for customers on the margin is a losing battle. But manufacturers and retailers can win by joining forces and aligning their strategy.
Consumers, and their creativity, create that shared purpose between manufacturers and retailers. The key is to work together to find ways to deliver a unique experience that consumers can’t find anywhere else. It’s all about finding opportunities at the intersection between shopper and business needs. Retailers must create spaces within their stores—in partnership with manufacturers—that deliver emotional rewards. The shopper experience is important, but insufficient without also delivering brand behaviors shoppers really value.
Achieving a fundamental understanding of consumers’ lives — not just the moments where a brand intersects with them — inspires everyone to think in new ways and to deliver experiences that really resonate with consumers. That’s a recipe for success.
As a Managing Director for C Space, Polly MacIsaac leads the consumer goods practice area, helping Fortune 500 CPG brands build relationships with target customers and create customer-inspired growth. She has spent over 20 years in consumer insights, marketing and brand management, building value for blue chip and emerging brands across numerous categories. She started her career in advertising at DDB Needham Chicago, eventually moving on to a role as VP of Marketing for Learning Curve International (home of well-known children's brands including Thomas the Tank Engine and Lamaze baby toys).
Robert Howie is a managing director at C Space where he leads the Retail Team. He was previously the chief commercialization officer for C Space’s Customer Quotient framework, IP that measures brand behaviors that consumers value. Howie also served as CMO of ICON, a contract research organization. He began his career in publishing and market research, co-founding two strategy execution consulting firms based on the balanced scorecard concept, including Palladium. His consulting clients have included Best Buy, Tesco, Wendy’s, the National Retail Federation, and retailers in the Middle East and Far East.