Consumer Chain Relationships

It is the responsibility of the retailer to maintain and encourage the relationships supporting the consumer chain.  These relationships cross from the consumer to the suppliers with all partners between.  There  are also many channels and routes supporting the consumer chain that require strong relationships to support.  The retailer is the hub of both the relationships and the consumer chain and so plays the critical roles of both communication hub and also relationship manager especially for consumers.  This presents a challenge to the retailer to manage not only between consumers and the suppliers but also across channels because of the differences in both communication capabilities and also the requirements.

The relationships between the retailer and the suppliers, carriers and and distributors is relatively straightforward because it can be defined and measured by contracts and service levels via performance indicators.  The contractual obligations can be clearly defined with the deliverables and obligations for which each party in the agreement is responsible along with the means that will be utilized to measure the performance.  Each party in the agreement will then be rewarded based on definitions and performance defined in the agreement.  These agreements are then reviewed and updated on a regular basis based on performance and schedule defined in the agreement.  These are all standard procedures based on contractual agreements that benefit each of the parties that are parties to the agreement.  The values realized by the parties are clearly defined over an agreed to period of time.

The consumer relationships are much more complicated and require a greater amount of effort in maintenance to achieve the benefits because, in part, there are no contractual agreements between consumers and retailers.  The relationship must continuously provide a value and generate the interest of the consumer to ensure they return to participate in the community and as a result purchase.  The relationship building with the consumer requires continuous encouragement and both real and perceived value for the consumer.  The consumer community is the vehicle that will provide this encouragement and value to the consumer.  The consumer relationship should be built on mutual benefits along with participation in the community that provides value to both parties.  Consumers perceive value through both discounts and value received from their participation along with the satisfaction of giving and receiving help from other members of the community.

There is no formal agreement between the consumer and the retailer which makes the relationship more difficult to maintain.  This is why it is important to encourage and reward the participation of the consumer in the community.  This participation provides the means and the reason for the consumer to return to the community.  This participation also provides the retailer with at least two types of value, the sales realized by the returning consumer and the data provided for analysis by the consumers’ participation and shopping patterns.  These provide a great value to the retailer and compensates the retailer for the time and the effort to maintain the consumer relationship.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?