Heeding the Call

Online or offline, two things are certain. No. 1, manufacturers and retailers will maximize profits and sales by collaborating to satisfy consumers’ changing needs. No. 2, co-marketing is not the way.

Co-marketing had the right idea—manufacturers and retailers working together. But it’s geared toward shipments, not solving consumer problems to build consumption, categories and brands. The future lies with the more contemporary, encompassing discipline of collaborative marketing, which benefits manufacturers, retailers and consumers.

To reap the rewards, manufacturers and retailers must accept each other as both collaborators and competitors. Though their business agendas differ in various ways, these two parties are inextricably linked by the goal of satisfying consumer needs. The belief that someone is either an ally or an adversary is outmoded.

Collaboration is a new-economy watchword. What else could explain arch-rival automakers Ford and DaimlerChrysler teaming up online, or competitors Hewlett-Packard and Eastman Kodak partnering to offer less expensive film processing?

Collaboration enables retailers and manufacturers to benefit from each other’s core competencies, which creates significant competitive advantages and efficiencies. Consider Wal-Mart and Procter & Gamble. Wal-Mart is more than a distributor for P&G. P&G is more than a supplier to Wal-Mart. By collaborating, each party benefits in ways otherwise impossible.

Talk about collaboration and modern-day retailing, and you must talk about the Internet and integration. Many experts agree the future holds a combination of offline and online retail sites. It won’t be “clicks” or “bricks,” but rather “clicks” and “bricks.”

Manufacturers and retailers must be consistent in how they collaborate (and compete) from retail site to retail site. Many consumers shop for products in one venue (online) but purchase them in the other (offline). Online efforts must resonate with offline efforts, and vice versa. It’s about cross-pollination and each retail site serving and supporting the other.

This broadens the definition of cross-shopping. Traditionally, cross-shopping described consumers jumping across different “bricks” channels. Now, it also means consumers jumping from online retail sites to offline retail sites, within the same channel.

Retailers and manufacturers must remember why they are collaborating—to drive consumer purchases and loyalty. Each element of the collaborative blueprint must benefit the consumer. Even the most cost-efficient cooperation is meaningless if it fails to resonate with shoppers.

Resonance requires insight. When manufacturers and retailers share insights, they can develop products and shopping experiences that positively influence consumer perceptions, purchasing behavior and loyalty—both online and offline.

In the final equation, by changing their mind-set, integrating online and offline retail sites and by executing seamlessly, manufacturers and retailers will connect more powerfully and profitably with the consumers they share, which is what collaborative marketing is all about.