Collaboration and compliance: The key to success for manufacturers and retailers.

Posted by Alki Manias on March 17, 2015

An improvement in collaboration and communication between manufacturers and retailers can only be beneficial to both parties. Particularly if it results in a benefit for the consumer. 

This win-win-win situation and customer centricity is often talked about at senior executive level in both manufacturers and retailers, yet unravels as joint initiatives are rolled out - resulting in lost sales, wasted marketing investment and consumers missing out on promotions and products. Win-win-win quickly becomes lose-lose-lose. The manifestation of this unraveling, is poor point of sale compliance at an individual store level and out of stocks. 

Discount retailing, price wars and economic downturns have created an increasingly cost conscious consumer. The signposts for price promotions are often supplier provided point of sale material. Yet these expensive marketing materials are poorly implemented on an individual store level or the product is simply not present in the right numbers. 

For instance, the UK arm of POPAI, in association with Storecheck Marketing, interviewed buyers and store managers and came to the staggering conclusion that at least £400 million is lost every year, as a result of POS not being correctly positioned, or in many cases completely failing to make it the last fifty yards of its journey, in-store. While more recently, the US arm of the same organization reported, based on more than 5,000 in-store observations that for every $1 spent on a POS display there was an average return of $3.18 incremental sales dollars when properly executed. Tesco_13

While according to Shelf Snap and the CMA, the typical in-store assortment is missing 28% of the items approved in the planogram, and at any given time, half of the planograms in the store do not conform to their agreed configuration. 

We've already explained how virtual reality store simulation can reduce capital expenditures, labour costs and speed to market in previous blogs, but perhaps just as vital, it facilitates effective field communication between all parties within the supply chain - for instance category managers and marketing/advertising teams can collaborate closely, implementing lean processes for testing on consumers and learning.  While retailer headquarters operations and individual stores at the sharp end of retail can do the same. 

, our web-based virtual software, speeds the communication process between head office and store and helps solve non-compliance problems that lead to out of stocks, confusion or lack of motivation and - perhaps most troubling - disappointed, disenfranchised customers. 

It works by allowing 3D videos or pictures, to be sent in real time, so a store manager can see the plan in real time. 

For example, we worked with a large chain that communicated via email with every one of its stores. By replacing this with virtual reality videos and photos in ShopperMX™, compliance substantially improved. 

If you are interested in improving your collaboration for the benefit of consumers arrange a demo of ShopperMX™ today. 

For more on how virtual reality store simulations are transforming retail already download our latest whitepaper: Faster, Smarter, More Profitable.


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