Direct collaboration between retailers and suppliers can improve their success in boosting conversion rates and sales figures across the board. Unfortunately, collaboration and open communication with suppliers hasn’t always been a top priority for retailers. But that’s beginning to change. The fact is, cross-channel communication is key to optimizing the shopping experience and increasing conversions as a result.
Retailers and suppliers have common goals: to increase sales performance and maximize return on investment (ROI). Effective communication between suppliers, retailers and even shoppers can help to achieve that. More importantly, both parties can work together to ensure shoppers have what they need to seamlessly complete their purchases, whether they’re in-store or online. Cross-channel communication is essential to successful retailer-supplier relationships, and there are four key ways it can help improve your retail ROI.
1. Improve Traceability
With traceability, both retailers and shoppers can receive granular information about a product’s individual ingredients or components as it moves through the supply chain. This may include details on batches of components (like catch or harvest date), purchase order (PO) data or other operational information. For instance, data produced in traceability can allow for more targeted recalls, reducing scale and cost.
For the greatest amount of accuracy, you must utilize a system specially designed to record and follow products, parts and materials as they come from suppliers, get processed and then get distributed as end products. This process will also include information about product quality, safety and labeling. Once this information is acquired, suppliers must select a collaborative platform to store traceability data and determine the best way to share it with retailers.
Shoppers also appreciate traceability as it gives them more insight into how products are produced and delivered. This is especially true for food products, as concerns about allergies, ethical standards and preferences drive shoppers’ demand to know more about the foods they consume. This shift is changing the way food products are marketed, turning the focus onto the manufacturer’s ingredients, processes and backstory instead of advertising alone.
Not surprising, the food traceability market is set to reach $14 billion by 2019, as reported by Cision PR Newswire. Brands have already started utilizing this approach with great success. Hershey, for example, partnered with Sourcemap Transparency Tool to show shoppers where they source their ingredients for Hershey’s Milk Chocolate with Almonds and Reese’s Peanut Butter Cups. By fostering this connection, both retailers and suppliers can build trust and alleviate shoppers’ concerns about purchasing their products.
2. Boost Promotional Activity
When suppliers and retailers commit to open and effective communication, the collaboration helps increase the success of promotional campaigns. This approach benefits both sides with an increased demand for products and boosted sales figures. Successful promotional campaigns can also help strengthen brand identity, and in turn, brand loyalty.
More specifically, a strong cross-channel communication strategy can improve the effectiveness of trade promotions. Retailers, for example, can share information about shoppers’ habits and preferences that can be used to adjust and optimize the promotion. Conversely, suppliers can provide insight on which products are best suited for the promotion due to stock, quality and other factors.
Suppliers often invest a lot of money into trade promotions, and when done right, they can yield positive ROI for both parties. Therefore, it is well worth the time and effort to implement tools and strategies to support open communication across all channels.
3. Drive Shopper Loyalty and Retention
As shoppers look for great deals, their focus on brand loyalty has decreased, leading to more competition between brands. With clear communication, however, it is possible to make campaigns more relevant and personalized to drive long-term brand loyalty. One of the best ways to accomplish this is by delivering fast and direct communication about orders, which is the driving force behind winning the loyalty of Millennials and Baby Boomers. Doing so requires clear and efficient communication between retailers and suppliers to provide shoppers with the right order information when they need it.
Furthermore, about 80% of shoppers are more likely to do business with a brand if they offer personalized service and support, according to research by Epsilon. This provides shoppers with a unique experience, which can encourage repeat purchases. In this way, retailers must find strategic ways to communicate with shoppers to extract data on their interests, habits and preferences. As a result, they can tailor products, services and the overall shopping experience in a way that keeps shoppers coming back.
So how does brand loyalty translate into increased retail ROI? The average person spends 67% more in his or her third year as a customer of your business than in the first year. And considering the cost to acquire new customers, it makes financial sense to develop and utilize cross-channel communication to help promote shopper loyalty.
4. Improve Customer Satisfaction
Today’s shoppers have high expectations: they expect brands to anticipate their needs and provide personalized offerings – even when shopping online. They want to feel personally connected to these brands in a way that fits into their lifestyles. The challenge, however, is that suppliers tend to only have contact with shoppers through their retail partners and can easily lose sight of their wants and needs, leading to decreased satisfaction.
Retailers can work on their behalf by collecting data on customers’ habits and preferences, and use it to forecast future behavior. They can go the traditional route and ask for feedback via surveys. Or they can apply advanced analytics by extracting data from digital interactions to remember, interpret and enhance these interactions.
Both parties can use the resulting information to get ahead of shoppers’ expectations. Not only does this helps brands build real relationships with their customers, but it also informs future trends and decisions for both retailers and suppliers to further drive customer satisfaction.
Boost Cross-Channel Communication for Improved Retail ROI
With the establishment of cross-channel communication, you can effectively serve the needs of your end user – the shopper – while also increasing retail ROI and performance across the board. Whether it’s used to improve traceability, increase promotional sales or drive loyalty and customer satisfaction, the ability to share data, insights, product information and more is crucial to the success of retailer-supplier relationships. Assess your current communication strategy, identify areas of improvement and implement systems, strategies and collaborative tools to find success.