Manufacturers and retailers have always had a mutual dependency. Manufacturers need retailers to sell their products, and retailers need manufacturers to stock their shelves. In the old days, the burden of brand experience, product positioning and sales performance primarily fell on retailers’ shoulders.

Most manufacturers did not control their own destiny. They kept their fingers crossed and accepted how things were being done as long as they hit their revenue targets.

Fast forward to today. A revolution in consumer behavior is the real story behind the headlines about the so-called retail apocalypse. A new retail model has emerged. Consumers are increasingly choosing digital commerce—whether marketplaces like Amazon or retailers like Walmart, Target, Best Buy and Nordstrom, or even click and collect grocers like Kroger—to research and purchase products. This is disrupting traditional channel dynamics. Digital shelves have become the place to tell brand stories and distribute, promote and sell products. This shift puts new pressure on the manufacturer-retailer relationship.

Limited control, little transparency, lost opportunity

Digital commerce spectrum

Manufacturers have some insights into how their brands and products should be presented on digital shelves. But they don’t directly control the shopping experience. Retailers do.

Yet retailers are struggling to manage the needs of so many brands with limited resources and bandwidth. Most do not do enough testing at the brand level to make informed decisions about optimizing experiences. As a result, brand stories are lost on product pages that all look the same, and products and brands are not differentiated enough across the consumer journey.

With digital performance so critical to revenue generation and growth, standing on the sidelines is not an option for manufacturers. They need to know that their brand, products, content, messaging, advertising, UX—the whole digital marketplace experience—is resonating with consumers. They need to take back some control. Doing this means experimenting together with retailers. It’s a win-win.

Brand stories are lost on product pages that all look the same, and products and brands are not differentiated enough across the consumer journey.

Optimizing performance with data-driven innovation

Experimentation gives companies the competitive edge in the digital world. Winners like Amazon, Google and Netflix have experimentation in their genetic code, and they use agile, data-driven approaches to continuously adapt consumer experiences.

Experimenting to optimize experiences is not new when it comes to digital.

But manufacturers experimenting on retailers’ digital experiences—whether on their own sites or on digital marketplaces—is new.

Revolutionary, even. Because the landscape is a juggernaut. The scale is immense. The complexity is overwhelming. And the consumer expectations are a moving target.

To cut through these challenges, manufacturers need to do more than rear-view mirror evaluations that come long after major investments are made. The experimentation must be rapid, upfront and continuous. The key is to treat every product page like its own P&L and hypothesize and test solutions based on consumer insights, trends and historical data.

But rather than optimizing with simply the hope that success will happen, manufacturers can set up experiments to rapidly determine what will drive optimal performance at scale. It is a quicker, more intelligent and more cost-effective path to profitability. One that is built on a foundation of facts, not opinions.

In a world where retailers typically don’t provide detailed reporting to brands because of resource limitations—or for fear of how they will react to the data—experimenting together may seem like wishful thinking. But it is an olive branch from manufacturer to retailer. What brands and their retail partners learn through experience optimization can be applied across the site, ultimately growing the overall marketplace.

Experiment… but in a whole new way

"Our success is a function of how many experiments we do per year, per month, per week, per day."

JEFF BEZOS, Amazon

How can this happen? Consider a global apparel brand’s initiative for retail partner optimization. The company needed a strategic approach to ensure resources were used wisely and that the brand and products got the right exposure across retail partners. The brand optimized its distribution network and invested in strategic relationships around the globe to drive marketplace growth.

The approach was very collaborative. The manufacturer and retailer identified and prioritized shared goals, problems and hypotheses that informed UX experiments on the brand’s experiences across strategic partner sites. The partners’ needs were more alike than different—80% of their goals, 60% of their problems, and 30% of their hypotheses were similar.

The team designed, implemented and measured winning experiments in key areas. They improved UX principles around calls to action and search functionality for mobile users and explored the use of shop-the-look experiences to showcase curated outfits on product pages. They also tested the impact of improved navigation, product features content, consumer reviews elevation, brand experiences and more.

Brands and retail partners both benefit when they research digital experience problems and test and optimize solutions together.

This ongoing global initiative has identified dozens of significant test results across multiple international retailers. Our analysis suggests that as the program and findings are fully implemented, there will be a material return on investment for both the manufacturer and retail partners.

The art of the possible is already happening

Brands and retail partners both benefit when they research digital experience problems and test and optimize solutions together.

This kind of success takes a clear vision, strategic process and earned trust. It is not about experimenting haphazardly without direction, shared input or a shared sense of the desired outcomes. Getting results and making informed decisions on how to act on them requires moving through several key milestones:

With a foundation of trust, the relationship can progress toward the ultimate goal. This is manufacturers having continuous and direct control of their brand and product experiences across their partner ecosystems—all the way to the digital shelf.

Think of it as the digital equivalent to taking ownership over the full supply chain. Going beyond content syndication, what’s needed is to transform the relationship with retail partners. Inspired by Direct Store Delivery (DSD) with the benefit of 21st century digital experience platforms, a new model—Direct Experience Delivery (DXD)—is the final destination. Giving manufacturers direct control to optimize their brand and product experiences within a retailer site also frees up the retailer’s resources to focus on differentiating and optimizing their digital shopping experiences, which is needed to successfully compete. Again, everyone wins from the performance improvements that come from constant testing and learning.

Making the most of digital experiences takes an ongoing commitment to testing and learning. Brands need to know if the right content, messaging and advertising is resonating with consumers.

The best way to find out is by experimenting together. Beloved brands with high-demand products have the leverage and influence to get retailers on board. And progressive, digital savvy retailers are likely to be the strongest partners.

But manufacturers must be good partners too. They have to be visionary. The goal has to be more than operational excellence. It must be an aspiration to transform the dynamics of how manufacturers and retailers relate, evolving from a supplier relationship to a true partnership.

Success starts with strategy

The final destination

Because nothing is static in digital commerce

Credits: Accenture Interactive. This article was originally published in Accenture Insights.

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