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In the current trading climate shoppers have been very quick to adapt their behaviour to the economic downturn and many retailers are also responding extremely fast to the new market conditions, by making bold changes to their ranging and promotional strategy. There is therefore a renewed urgency for suppliers to truly understand their customers’ strategic direction and adapt their approach accordingly.
Shopper insight capability is becoming a must-have to cement effective trading relationships and identify joint growth opportunities in a tough trading climate. Additionally, the combined effects of an increase in promotional intensity and pressure on input costs mean that the suppliers which are more advanced in terms of promotion management and trade spend evaluation have a real edge on their competitors. Best in class suppliers are leveraging their knowledge of trade spend effectiveness to manage costs, spend “wisely” and maximise trade spend impact with their key customers.
These are just some of the key findings from our new research, Building Customer Engagement Capability in Recessionary Times. Since 2004 we have undertaken a detailed survey of retailers and suppliers to understand how trading relationships are evolving. This year we have focused on understanding what will be the key focus of trading relationships over the next 12 months, and determining whether or not strategic trading relationships are still important in the current climate.
Based on our unique industry survey of over 150 retailers and suppliers, and supplemented by over 20 in-depth interviews of senior industry executives, this research identifies what customer engagement capabilities suppliers need when trading is tough and what capabilities do retailers value most.
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