The TCG Summit is an annual health check of the state of the technology retail industry. This year in Geneva the pulse was beating hard in the direction of collaboration. We started with a humorous wink at Brexit when Declan Curry, the event facilitator, greeted us as “Fellow Europeans!” His provenance from the British Isles made us all laugh, as we anticipate tectonic changes in Europe. But the spirit of collaboration was strong, as Chris Bücker, the event organiser said, “more than ever we have to co-operate, building a customer centric model and collaborating to innovate.”
Why collaborate? “Because it creates more value, in fact it doubles”, said Daniel Duty, founder and CEO of Conlego. He made this real with examples, such as the collaboration between a white goods manufacturer and a US retailer. Instead of a normal negotiation around cost, each discussed their respective goals and needs – it ended up that the white goods manufacturer paid for show kitchens in the retailer’s stores in return for having their white goods displayed there. Both were winners.
The retailers were positive – “we are open to sharing data for the mutual benefit of the market and the end customer” said Oleg Muraviev, Commercial Director of MVideo. Hans Carpels, President of Euronics, cited the collaboration between retailers and manufacturers in Italy in the payment system known as EDIEL There remain, nevertheless, barriers of trust to be overcome. One of the top questions from the floor was why retailers are so reticent to share data with manufacturers and as Cyril Buxtorf, EVP EMEA of Groupe SEB put it, “There is more to be done in data sharing.” “A new generation is needed to change the current framework and move with more transparency from a supplier procurement model to a customer driven business,” said Frank Bussalb, VP Procurement of Media Saturn. This new generation is one that has been brought up to view data and sharing as something inevitable and necessary – how many retailers have got millennials sitting in their senior management teams coaching and encouraging the new behaviours?
“Pace is not just a question of time and speed; it is also a question of whether you challenge yourself often enough.” Antreas Athanassopolous, Chief Customer Officer, Dixons Carphone
Ultimately it is a company’s culture which will encourage collaboration, and we heard examples of how this works:
The TCG Summit welcomed back an old friend in Régis Schultz, now Chairman of Monoprix and formerly CEO of Darty. Reliving the last time he was at the TCG Summit during the final stage of negotiations for the purchase of Darty, he shared his experience of partnership, and no-one is in a better situation to illustrate both the advantages as well as the pitfalls, having made deals with Ocado and Amazon. Who you pick as your collaboration partner is vital, as you only get to pick a few companies to develop this type of intimacy with.
“Partnership is a way of catching up learning – we chose Ocado because they understand food ecommerce like no-one else.” He went into the three reasons for the partnership with Amazon: “a) to expose the Monoprix brand to new customers via Prime b) to provide extra service to the customer such as 2 hour delivery in Paris c) to learn from them - collaborating with Amazon is a fantastic learning experience with the most successful retailer of the generation.”
Régis has nerve in adopting this strategy. Is it not entering the jaws of the lion for a retailer to get close to Amazon? Maybe, but the old Roman expression is that “Fortune favours the bold” – and this particular retailer is exploring partnership to transform itself fast. As Antreas from Dixons Carphone said in his keynote “Retailers have a deep commercial understanding – their greatest challenge is to keep up with the pace of change.”
Two important commercial threats were alluded to: time, maybe sooner than later, will see how these play out:
Attending a conference like TCG is transformative: new ideas are catching, and so a niche supplier of ironing products started discussing with one of the large players about a joint in-store marketing campaign to build the public image (and sales) of ironing products. The jury was out from both retailer and manufacturer perspective as to whether this could take place, but the thinking was bold and innovative. This was the spirit of the Summit and it is what retailers need to do.
Or as Stuart Blanch from Intel put it at the very outset of the conference: “Disruption requires collaboration for us to win.”
© CONTEXT 2019