Originally featured on content26’s blog, Profitero analyst Ryan Jepson offers advice for brand manufacturers and online retailers for how they can best work together to create partnerships that will benefit both parties.
The traditional working relationship between buyers and sellers in the brick-and-mortar world is being transformed by the explosive growth of online retail.
To help brands and e-retailers successfully partner online, we recently interviewed two industry experts, Tim Dorgan, SVP of Marketing Services at CROSSMARK (and formerly of Peapod Interactive), and Chris Drumey, Head of ecommerce at United Biscuits (and formerly of Coca-Cola).
Below, Tim and Chris share a few starting points for mutually-beneficial partnerships; for the full interviews, recommendations, and case studies, see Profitero’s latest white paper.
For Brand Manufacturers
1. Be sure you’re supplying retailers with accurate, current product data and visuals
Tim Dorgan: “It may not sound all that exciting, but one of the first things you need to do when you’re getting involved in eCommerce is make sure of the integrity of your images and your product data.
Profitero’s comments: Product content integrity has three components—creation of high-quality, accurate content either in-house or with a product content creation firm like content26; distribution of that content directly to retailers or through a Digital Asset Management system like Kwikee; and monitoring and analyzing that content in real-time using an ecommerce measurement company like Profitero.
In one analysis of 1,000 products in the cereal and household cleaning categories at major online grocers, we found 4 key differentiators for product page visuals:
1. A large number of images 2. Medium-to-large image sizes 3. Ability to zoom images 4. Presence of video on product pages
As the requirements and capabilities of retailers differs widely, especially for product page images, brands and retailers must work together to create, store, monitor, and analyze product page content.
2. Assign dedicated digital teams to work with e-retailers—it’s a top priority, not an afterthought to brick-and-mortar
Chris Drumey: “The brands that will win are the ones who think of online first in their planning. The companies that will lose are still developing their brand plans and promotional plans around brick-and-mortar—and then copying and pasting them to their online operation, almost as an afterthought.”
Profitero’s comments: Regardless of position, everyone is a stakeholder in a brand’s ecommerce presence. But we see our customers succeed most when they have dedicated ecommerce teams who have the time and energy to focus on the difficult task of managing a brand’s online business.
3. Prepare to think creatively about your e-retail channel, since it offers more flexibility than brick-and-mortar
Chris Drumey: “In e-retail, manufacturers have more of an opportunity to think creatively about product placement and work with the retailers on it. In brick-and-mortar, you see more rules and restrictions, such as clear aisle policies or retailer templates for point of sale materials.”
For example, “You can provide shoppers with a recipe as a bit of inspiration, and they can add all of those items into their basket with one click, instead of walking to the four corners of the store to find everything.”
And retailer-specific programs offer opportunities for creative promotions. Below is an example of one between Coca-Cola and Amazon Prime Pantry:
1. Commit to testing and learning with your sellers over the long term
Tim Dorgan: “I think continuity of involvement is what it takes for a CPG-retailer partnership to succeed. Don’t view it as a test here and a test there, but look at the partnership on more of a longitudinal basis.”
For brands, the value of ecommerce operations on a specific site is not limited to the direct, immediate sales but includes the brand equity generated by the brand’s visibility, promotions, and product content.
For e-retailers, there is a positive feedback loop when you contribute to building your suppliers’ brands. Perhaps immediately, but likely eventually, you will sell more of these products. And in the process of leading in the areas of assortment and product content, you will be improving your own retail brand’s equity.
It’s a long term project—one that benefits both brand and retailer.
2. Share your data freely with your brand partners
Chris Drumey: Sharing data “helps suppliers ensure their offerings are optimized, that they’ve got the right keywords and product descriptions to help with search, that impact shots are displayed in the best way, and that their media selection has put them in the right place. That idea of sharing and learning together is definitely what helps generate success.”
Profitero’s comments: The benefits of sharing data freely include:
Increased competition between brands benefits consumers (and retailers!). For example, if brand A realizes brand B is undercutting their prices, brand A might respond with a temporary price cut – potentially boosting sales on the site.
Brands are often better equipped to optimize their own product pages. For example, when brands optimize product content to appear in search results for key category terms, they are not only improving their own search rankings but also increasing their findability for interested shoppers.
3. Be on the lookout for qualitative insights amidst the vast quantity of data
Tim Dorgan: “Make no mistake, it’s wonderful to have all that data. But I’d also advise retailers to add a caveat when they’re sharing data—namely, that neither they nor the brand should get too hung up on Big Data… You have to realize that insights are qualitative as well as quantitative.”