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Collaborative innovation key to cpg/retail success, Kalypso finds

Sunday, July 17, 2011  
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Today’s cpg/retail leaders are looking to collaborative idea generation -- working with many partners in the value chain, including competitors -- to discover new and meaningful ways to satisfy the customer and build bottom-line results. But few industry players excel at collaboration, which among other traits, requires diversity of leadership, according to a study by Kalypso.

In a survey of more than 170 executive Network of Executive Women members, Kalypso found manufacturers and retailers with a well-executed collaborative innovation program in place have the potential to improve sales and profits 15 to 20 percent.

With retail consolidation and private brand growth, cpg manufacturers must recognize their biggest customer may also be their biggest competitor, the study found. Still, the benefits of cpg manufacturers working closely with retailers are many, including insight into shopper needs; opportunities to differentiate in ways that drive equity and make the manufacturer indispensable to the retailer and access to more retail space and greater success of new items.

For retailers looking to differentiate manufacturers’ offerings to meet their shopper strategy, collaboration with manufacturers is a way to provide an improved shopping experience for their customers through consumer insight/sensory market research; offering complete convenience solutions to shoppers by bundling offers; and creating a better shopping experience in the store.

While the vast majority (97 percent) of survey participants believe it is "very important” to be a strong collaborator and innovator, only 35 percent rated their efforts "excellent.” One of the most significant barriers cited is the impression that "too much collaboration can be perceived as a lack of strong decision making,” the survey found.

The industry leaders clearly defined the characteristics needed for collaboration. The top five qualities industry leaders believe are needed for collaboration are: listening to customers, partners and cross-functional teams; using diversity to form opinions; avoiding the "not invented here” syndrome; communicating clear strategic objectives and priorities; and sharing the glory.

When asked to rate the diversity of their leadership teams, 59 percent of survey participants described their leadership teams as somewhat diverse on gender, 30 percent as somewhat diverse ethnically and 41 percent as somewhat diverse geographically.

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