Marketing to retailers: A battle for distribution?

Abstract

There have been two revolutions in retail trading in the history of distribution; the emergence of retailing as a specialist function and the growth of multiple retailing. The slow rate of change in the distribution system, when viewed from the perspective of long term control, has tended to obscure the extent of a third revolution, that of retailer power. Penetration rates of own label merchandise, in particular, could be being seriously underpredicted. The strategic response by manufacturers has been mixed and, arguably, inadequate in the circumstances. While the typical consumer product manufacturer has developed an understanding of the needs and wants of the consumer, less attention has been given to understanding retailer strategies and how the manufacturer can tailor its offer to suit the individual retailer. Some options are presented for consideration, in particular a focus on closer collaboration between manufacturers and retailers and better integration of their contributions to the supply chain creating mutual dependency.