Why Focusing on the Manufacturer-Retailer Relationship is a Winning Strategy


Manufacturers and retailers have always had an important, symbiotic relationship. Given the supply chain issues caused by the pandemic, however, that relationship changed. With difficulty moving products from one place to another, many manufacturers began exploring direct-to-consumer sales as a way to maintain growth through uncertain times. In fact, D2C sales have been on a steady upswing for years, and are projected to surpass $200 billion by 2024.

Still, as the drive towards D2C continues for manufacturers — which mirrors a similar drive towards retailers entering the manufacturing space — it can’t be understated how valuable the relationship with retailers truly is. When executed successfully, and in close collaboration, this relationship can be wildly beneficial for both parties.

How the Manufacturer-Retailer Relationship Succeeds

The importance of a strong manufacturer-retailer relationship comes down to the insights each side can provide to the other. Retailers are privy to a host of customer-level metrics from information gathered across store locations and product lines, which can be used to help manufacturers in their decision-making. Conversely, manufacturers have access to product-level insights which can aid retailers in sales and customer service areas.

For example, let’s say a sunglasses manufacturer is looking for insights into developing their next product line. With a strong retailer relationship, they can tap those connections to uncover insights on which current frames are selling the best across brands, and which price points are resonating with their target demographics.

In this same example, the retailer could garner insights from the manufacturer to get system-wide sales information across multiple retailers. By understanding which of the manufacturer’s products have been selling the best and how other retailers are promoting them, retailers can make more informed decisions about advertising and discounting strategies.

Additionally, as new products are released, the manufacturer can provide the retailer with updated, detailed product information which can be used to aid in sales and customer service inquiries.

Tips for Forging a Strong Manufacturer-Retailer Relationship

Establishing and maintaining relationships between manufacturers and retailers can be challenging, especially as both parties have multiple vendors to manage. With a small amount of upkeep, however, this relationship can pay dividends. Here are four tips for maintaining a mutually beneficial manufacturer-retailer relationship:

1. Get Your Teams Together for Regular Meetings

Going that extra mile to have regular face-time with manufacturers if you’re a retailer (and vice versa) can go a long way. When establishing these meetings, make sure that they’re at intervals that don’t make them a hassle; weekly, monthly, or even quarterly check-ins are fine as long as they’re productive. These meetings can be used to discuss ongoing projects, plan for the future, and address any concerns. The important thing is establishing an open line of communication and building that relationship.

2. Keep the Collaboration Strong for Every Stage of the Customer Experience

Earlier, when discussing the benefits of a strong manufacturer-retailer relationship, we discussed the importance of shared insights. Working together through every step of the value chain means sharing those insights to inform decisions in product development, marketing, and customer service. Having shared insights can help both parties understand each other’s needs and work towards a shared goal.

3. Start Right Away to Establish a Common Baseline

Effective communication early on in a relationship can establish trust, particularly in key product development and testing phases. What’s more, by focusing on collaboration early, both parties can understand each other’s priorities, goals, and metrics for success so everyone is working to the same end.

4. Keep Information Consistent and Uniform Across All Teams

One of the key communication breakdowns between manufacturers and retailers typically involves product information, specifically when dealing with a catalog of dozens or hundreds of SKUs. By implementing a Product Information Management (PIM) solution or shared database of detailed product information accessible by both parties, your organization can ensure that customer service and sales teams are all provided with current, relevant product information that helps minimize confusion and streamlines processes.

Bonus tip: Have a predetermined set of guidelines for data entry so both parties know what everything means within the system.

A Mutually Beneficial Relationship

The manufacturer-retailer relationship is built on open communication, information sharing, and trust. When both parties are willing to give as much as they receive, the insights both parties have to offer can be the foundation of successful operations that bolsters sales and increases customer satisfaction.

Kristin Naragon is the chief strategy & marketing officer at Akeneo.