ADAPTING TO A NEW LANDSCAPE: MANUFACTURER-RETAILER RELATIONSHIPS IN THE DIGITAL ERA

7th International Conference on Research on National Brand &Private Label Marketing (NB&PL2020)

Disruptive forces like digital and mobile technology as well as major trends in the composition of the population bring many opportunities but also multiple challenges to manufacturers and retailers that are operating in the current retail landscape. Strengthened by mobile technology, consumers nowadays have access to several channels that are used simultaneously and sometimes even interchangeably in their purchase decision process. Consumers are no longer shopping in the same way as they did a few years ago, and how they interact with manufacturers and retailers has changed fundamentally. 

Manufacturers and retailers are being compelled to more frequently rethink and adapt their organizations, strategies and even business models to satisfy, retain as well as grow their customer bases. These adaptations oftentimes aim to optimize the customer’s experience with the manufacturer’s brand or the retailer’s brand throughout the whole customer journey, thereby increasing the chances of the company to survive in the new retail landscape.

At the same time, some of these adaptations have significantly altered the relationship between retailers and manufacturers. A few decades ago, the purchase path of consumers was clear: manufacturers produced products and these products were sold via (offline) retailers to the end-consumer. Retailers and manufacturers were thus partners in the supply chain with each of the partners having its own strengths. Manufacturers are champion in producing and marketing strong brands that consumers desire, while retailers excel in bringing products at a place and time where consumers prefer to purchase (multiple) products (and categories). Via their private labels, retailers also gave consumers the option to sell a (high-quality) product at a low(er) price.

While retailers and manufacturers are still partners in many interactions, their relationship is put under pressure as a result of opportunities offered by the digital era. Manufacturers, for instance, have the possibility to directly sell to end- consumers, via manufacturer-owned webshops or platforms where manufacturers can offer (part of) their assortment on a third-party-owned website. Such disintermediation acts, where retailers are excluded in the supply chain, have a significant impact on manufacturer-retailer relationships: manufacturers that used to be partners all of sudden become competitors too. Also other technological innovations implemented by retailers or manufacturers can challenge manufacturer- retailer relationships. Think of voice-assisted techniques as Alexa, where companies (in casus Amazon) restrict the choice set of consumers to a very limited, if not only one brand (of their own). Or, initiatives like food boxes where for instance, a retailer decides which brands to (not) include, or subscription services where a manufacturer delivers (their) brands on a regular basis directly at a consumer’s doorstep.

As companies continue to look for ways to adapt to the new retail landscape, it is essential to understand the impact of the digital era and the resulting transformations on manufacturer-retailer relationships as well as on the ability to build strong (manufacturer and retailer) brands that create market value. In keeping with its established objectives, this conference welcomes papers on topics related to any retailing, private label, or national brand issues.