For years, the relationship between CPG companies and retailers has been complicated and what is supposed to be a collaboration, has fallen on the competitive or opposing ends of the spectrum. Now, the circumstances call for a new approach that creates benefits for both. We’ll likely see collaboration between retailers and CPGs since the times demand cooperation for both parties to thrive. Thankfully, Visual Intelligence and AI create new and easy ways for retailers and CPG to collaborate.
CPG brands and retailers share similar and interrelated goals. They both strive for excellence regarding the products and services they provide, and creating a brand identity is equally essential for both. While it’s fundamental for CPG brands to remain innovative and use the data well, the same can be applied to grocery retailers as well.
However, we are still yet to see a mutual agreement between CPG brands and retailers for their market strategies, especially with pricing. The difference mainly stems from their focus. CPG brands aim for brand loyalty towards their specific products, while grocery retailers prefer establishing themselves as a whole store with competitive prices.
They are both dependent on each other, which creates a significant opportunity to grow. Statistics show that successful collaboration can improve the operating margin more than 5 percent, and it falls on both parties to achieve such a collaborative partnership.
Why do CPGs and Retailers Need to Collaborate?
First, a healthy collaboration between CPGs and retailers can open the doors for lower costs for both parties. Considering how increased costs may affect their business plans, collaborating with each other might ease the pressure on CPGs and retailers.
Moreover; this would nurture a better consumer shopping experience which holds a special place for both parties because it helps them to increase their brand awareness. Consequently, a better shopping experience with low costs results in increased revenues.
How to Improve the Partnership Between CPGs and Retailers
Here are the proven ways of improving the partnership between CPGs and grocery retailers.
The very first and the most important step towards a better collaboration is building the utmost trust between each party by ensuring a transparent relationship.
According to Harvard Business Review, retailers that trust the manufacturers generate approximately 78% more sales than those with low levels of trust.
Establishing a trusting environment needs to be all-inclusive. From the field teams who actually take part in day-to-day operations to the C-level directors, there should be a mutual sense of trust which can be established by actionable insights from real-time reports.
Setting Mutual Plans
Planning is a key factor to becoming successful, and CPGs and retailers need to establish mutual plans to achieve successful growth. One of the most effective ways of setting mutual plans is to work on the same platforms whether it's digital or physical and the advantage of digital platforms is bringing the AI touch to the partnership. Since making use of the data is essential for both CPGs and grocery retailers, using image recognition and artificial intelligence can help tremendously.
Vispera lets CPGs and retailers meet on common ground with advanced retail execution and high-accuracy data analytics.
Use of Data
There’s a constant change in consumer trends in the retail industry, and the most optimal way of keeping track is by making good use of data. For a healthy collaboration, grocery retailers and CPG brands must learn ways to look out for both parties’ interests when they make use of the data.
Retailers have the upper hand in collecting first-hand consumer data as they can gain insight into how consumers behave in the store, to what extent they engage with the brand, and what their general purchases are.
On the other hand, the data that CPGs collect can provide more detailed information about the business. As CPGs are usually more equipped with AI-based tools and analytics, they have access to specific information such as pricing and space optimization.
If CPGs and retailers can manage a collaborative partnership, they can bring the best of both worlds by combining CPGs' industry data with retailers' consumer data. Thus, successful promotional campaigns, price incentives and discount models can emerge together for both parties.
One thing that CPG brands and grocery retailers should find in common is the need to stay innovative. and using the same old tactics over and over again is just another way of saying “I’m out!”.
To establish a continuous partnership, CPGs and retailers need to find common ground in which they can implement innovative strategies for their future growth. Digitizing the operational process is the first way to establish a better and more reliable collaboration so that CPG and retailers can provide a better shopping experience to consumers.
Making use of AI-based analytics and image recognition solutions can play a great role in this regard. Machine learning-oriented market solutions are making their way through the business world, and CPGs and grocery retailers can come up with innovative strategies through visual intelligence methods.
Eliminating the Pressure
The pressure between CPGs and grocery retailers may arise from differences in channel demand, changing consumption habits of consumers, and developments in technology.
However, there are certain ways that can help both parties eliminate the pressure and form a healthy collaboration.
Implementing Cloud-Based Infrastructure Solutions
Cloud-based infrastructure solutions enable retailers to give a fast response to changing circumstances and pave the road for more efficient collaboration with CPG brands.
This allows both parties to obtain immediate data about consumers, and the use of AI can improve the efficiency of collaboration between CPGs and grocery retailers. With the help of retail execution technology, both parties can maximize the value of their workflows.
Smoothing Out Complicated Processes
Advanced analytics tools simplifies complex and time-consuming processes such as pricing, inventory and shelf management which allows CPG brands and retailers to focus on the strategy.
Introducing AI-based solutions for such complex processes can help both parties to eliminate potential friction and this helps CPGs and retailers to have a smooth and steady partnership.
Improving Computer Vision Solutions
Keeping real-time track of stock levels, shelves and storage is a complicated and pretty difficult task. Employees need to be on alert constantly, and the transfer of information is a rather unwieldy process. But, with visual intelligence solutions, all the tasks above can be completed instantly.
Vispera is Here to Help
Vispera is an AI-based image recognition and analytics platform that provides computer vision solutions for CPGs and grocery retailers on a global scale. We offer a comprehensive set of solutions to enhance retail execution and tracking.
What Vispera does is process retail shelf images and notify field teams in real-time with its in-store analytics system. Our image recognition solutions allow retailers to get rid of manual data collection and reporting processes, leading to faster resolutions and smoother workflow.
With Vispera, it’s only a matter of time before starting to collect more accurate and on-the-spot data and improving the efficiency of collaboration between CPGs and retailers.
See how Vispera transforms retail execution with innovative, AI-based solutions. Request a demo here.