DSN webinar sizes up the future of strategic partnerships in a post-COVID world

Levy

COVID-19 has impacted all types of businesses, including suppliers and retailers. 

In a Drug Store News webinar held Thursday, Dan Mack, founder and managing director of Mack Elevation, outlined the ways that suppliers are making more thoughtful choices about which retailers are best positioned to partner with moving into the future, and what is needed to develop the best relationships going forward.

The full webinar, presented by Mack Elevation, can be watched on-demand here.

Mack's recent research entailed speaking to 25 suppliers and 16 retailers who shared their experiences to help understand how retailers and suppliers can stay in alignment amid the current challenges in the industry. 

“There is magic in a partnership when it’s done well. One and one equals three. The challenge is that 8 of 10 partnerships break up due to being too transactional and lacking transparency," Mack said "The best partners invest together, sharing risk and working with speed on what’s relevant."  

Mack consistently heard from 80% of the execs he spoke with that successful partnerships are not transactional and based in transparency, speed, agility, necessities and trust. "Those were the common messages from the retailer and supplier community," he said. "What do we need to do differently to build this relationship?"

Mack pointed out that the difference between success and failure in everything is an expectation. "You can be doing your best work, but if you partner expects something different, there’s a gap, and you’re losing," he said.

Many of the comments Mack shared were focused on the importance of communication, in particular honest communication that is unafraid of sharing bad news and instead focused on quickly responding. Additionally, retailers said they valued companies that are good at the fundamentals, who are advocates for evolving customer needs and who can creatively find ways to meet consumer demands in an agile way.

Mack said that over the past 10 years, he has seen suppliers struggle with what he called the triangle of pain." "They overestimate their relevance; there's a lack of transparency; you’re not as agile or flexible as you think you are," he said. "Most companies are not fast. You have to be real about how agile you are.”

Mack cited best practices and partnership research which revealed that the most aligned retailers believe in mutual proactive alignment with their supplier partners.  

“They also feel that a flexible [joint business partnership] that adjusts to real time learnings, highlighting competitive threats and new consumer insights, and they believe in a commitment to ongoing discussion cadence, reassessing goals, seeking new opportunities and co-designing future innovations," Mack said. "Retailers also value proactive incremental funding discussions that offer clear justification on why the investment serves both parties."

Among the behavior suppliers expect from their retailer partners is a co-creation mentality, with joint ownership of the plan and mutual agreement on metrics; a relationship in which both parties have an equal voice in plan design; the cross functional team assesses and adjusts in real time the business plan; they operate through the customer’s eyes, sharing emerging insights and assessing trends conveyed by suppliers.

Mack emphasized to retailers the importance to suppliers of an annual kickoff meeting to convey goals and strategies, as well as engaging in quarterly reviews to course correct the plan, and 1 to 3-year innovation pipeline meetings.

“Companies only focused on bottom line, don’t do well on partnerships," Mack said. "Partnerships must transform. They have to go deeper. You have to be open and transparent and look in the mirror, checking in with your partners, and asking, are you struggling? Do more experimentation. Be more agile. You are testing things. You have to be agile.”  

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