Collaboration Nation

Purchasing personal care products at a bus stop might seem an impossible feat.

But Canadian commuters had the opportunity to do just that in June, when Walmart Canada and Procter & Gamble Inc. (P&G) launched mobile stores in 50 Toronto bus shelters, allowing consumers to shop on-the-spot and have items shipped free to their homes.

The campaign featured posters of popular P&G baby and beauty products and highlighted items Canadians had named Canada's Best New Products. Customers were able to scan QR codes from their mobile devices, then order items including diapers, mascara, shampoo and toothpaste. The collaborative promotion highlighted each company's focus on e-commerce and gave people who aren't regular Walmart patrons the chance to easily access myriad products without visiting a brick-and-mortar store.

"We know that our customers are increasingly pressed for time and this campaign allows us to help Torontonians shop for essentials on the go, anywhere, at any time," Simon Rodrigue, vice president of e-commerce for Walmart Canada, said in announcing the program. "Whether in our stores or online at Walmart.ca, we're committed to delivering a fast and easy shopping experience for our customers."

That promotional partnership is one example of the growing interest in collaboration for mutual benefit. Increasingly, vendors and retailers are sharing information and teaming up to produce greater results for manufacturers, stores and customers alike. Besides marketing partnerships, multiple parties also are working together to improve food safety and supply chain logistics.

"For the last 40 years, GS1 US has seen industries achieve remarkable progress when they work together," Angela Fernandez, vice president, grocery retail and consumer packaged goods at GS1 US. GS1 US is a member of the global GS1 information standards organization that brings industry communities together to solve supply chain problems.

Teaming Up On Promotions

Collaborating on marketing and promotions can lead to innovation, increased customer loyalty and profits when implemented effectively, experts say. In a survey soon to be released from The Promotion Optimization Institute and Capgemini, 91 percent of manufacturers of fast-moving consumer goods said they believed collaborative promotion optimization was the key to overall success, reports Michael Forhez, principal, consumer markets, Capgemini Consulting.

But challenges remain."A relative few retailers and manufacturers will argue the point that there's an industrywide need for better collaboration on promotion planning," according to "Promotion Collaboration–Five Steps to Success," a research study sponsored by IBM Smarter Commerce and Booz Allen Hamilton in partnership with Trade Promotion Management Associates.

While distrust between retailers and manufacturers is often cited as the main impediment to collaborative promotional efforts, 75 percent of survey respondents identified lack of data consistency as the primary problem. Other barriers to effective collaboration include failure in getting timely data; lack of joint key performance indicators (KPIs); inappropriate tools; misaligned or lack of defined objectives; and lack of a process, the research showed.

"Collaboration is easy as long as the obvious goal for each party is to simplify the customer experience with the result of enhancing loyalty and share of spend. The only difficulty we find is collaborating on the methods to obtain the goal when there are definite areas of expertise within each organization," says Rich Tarrant, CEO of MyWebGrocer.com.

Retailers unfamiliar or uncomfortable with digital marketing efforts that involve mobile, email and social media initiatives, for example, might hesitate to engage in the collaborative initiatives MyWebGrocer employs–even though those programs are trending today. "Typically this gets resolved by communication, education and trial campaigns," Tarrant says.

The Walmart Canada-P&G bus stop initiative is one example of a collaboration focused on the digital space. A recent promotion from Campbell Soup Co. and ShopRite is another.

The promotion targeted consumers in ShopRite with a digital ad of sale items, Tarrant says. It combined Campbell's Chunky Soup with an on-sale ShopRite product, such as noodles, potatoes or cornbread, to create a complete meal solution for busy shoppers.

"When the consumers clicked on the advertisement, they were driven directly to their local ShopRite store's circular, making it easy to add the item to their online shopping list," Tarrant explains. "In effect, Campbell's was able to target the appropriate consumer for their product and drive a purchase at ShopRite. Campbell's runs a measureable and successful digital campaign and ShopRite makes the sale."

The results illustrate how significantly collaboration can impact a promotion. It led to a 59.9 percent conversion for ad circular views, and–perhaps most impressive–to a 180 percent increase in product sales from the prior year. "All parties, including the consumer, benefited in this collaboration," Tarrant says.

Working Together on Food Safety

Collaboration increasingly is playing a larger role in promotions, but it might be even more vital in the area of food safety. In fact, collaborative efforts are not only desirable, but essential to food safety, says Fernandez, who notes that creating better alignment is one of the biggest challenges the industry faces.

"That means trading partners must agree on a single way to do business," Fernandez explains. "By identifying, capturing and sharing information about products one way, trading partners can achieve interoperability, which leads to greater supply chain visibility."

A recent recall of frozen berries from Townsend Farms of Fairview, Ore., sold at Costco warehouse stores under the name Townsend Farms Organic Anti-Oxidant Blend, illustrates how important visibility and collaboration are from farm to table, especially during a time of potential crisis.

As of July 10, the Centers for Disease Control said the berries had been linked to 143 cases of illness in eight states and an outbreak of a strain of Hepatitis A that is rarely seen in North or South America but is found in the North Africa and Middle East regions. Bill Gaar, a lawyer for Townsend Farms, said the berry blend contained pomegranate seeds from Turkey, and they were only used in the product associated with the outbreak, according to a May 31 Associated Press story.

Both parties acted quickly to minimize the crisis. Townsend Farms recalled the product and began tracing the problem seeds to the source. Costco notified customers who purchased the berries, provided vaccinations for anyone who ate the berries during a specified timeframe, and reimbursed others who received vaccinations outside of the store, according to Craig Wilson, Costco's director of food safety.

While the quick actions stemmed the Hepatitis A outbreak, several lawsuits have been filed, with the plaintiffs accusing Townsend Farms and Costco of exposing customers to dangerous products and negligently endangering their welfare. The companies declined to comment for this story.

A March 2012 pilot program that tracked imported fresh produce from Chile to the United States was designed to avoid situations like the berry recall. "It is difficult today to trace produce given the lack of standards in use. This effort demonstrated that produce can be tracked from field, through customs, to warehouses, to stores due to the use of global standards and data exchange," Fernandez says. "Considering the number of recalls we see today, the outcome of the traceability program is quite significant."

The challenge was to implement Produce Traceability Initiative (PTI) labeling and communications standards from the Chilean table grape growers through the Port of Valparaiso and the Port of Wilmington, continuing with C.H. Robinson to the Associated Grocers of Baton Rouge and finally to retail stores across the southern United States.

Bayer CropScience worked with FoodLogiQ to implement the PTI labeling hardware and traceability software at the Chilean grape-packing sheds, which were linked to C.H. Robinson's logistics network.

As a result of the multicompany collaboration, Associated Grocers tracked 450 cases linked to 275 shipments and 270 unique stores. In one week, every store Associated Grocers serves received a case of Subsole grapes from the same lot. The program enabled Associated Grocers and C.H. Robinson to move a step closer to full electronic traceability record management for fresh produce, the case from GS1 US notes.

"The pilot went into production, and identifies how product is moved today," Fernandez reports.

Clearly, collaboration is escalating in importance as the industry evolves. And companies that ignore it do so at their own risk.

"Unless you're going it alone, collaboration in this age must be based on a realistic and shared understanding of where retailers and manufacturers can, and should, partner on product assortment, pricing and promotion," Forhez says. "This will require a far more sophisticated understanding of what 'win-win' should mean, with decisions going beyond simple price elasticity analysis and category management techniques, as we move into predictive analytics for demand planning, promotion and SKU optimization.

The key, he believes, lies in designing new collaborative processes and agreements driven by a laser focus on delighting the consumer.

Freelance writer Kathy Furore covers business topics for publications including Progressive Grocer, Convenience Store News, Hispanic 360 Retail and el Restaurante Mexicano magazines.