A group of industry insiders debate the current state of JBP but reach consensus on where it should be heading for the benefit of manufacturers, retailers and, ultimately, shoppers.
Three essential elements of JBP are transparency, collaboration and agreed-upon performance indicators. “KPIs [key performance indicators] ensure that both sides are working against a consistent set of metrics that will help drive each respective business,” McGowan says.
Currently, collaboration tends to be lopsided, “but JBP at its best entails that the retailer and the brand co-create programs that meet the needs of the brand, the retailer and the shopper equally,” says Brace, adding that retailers prefer partners who demonstrate they understand category growth drivers and have a category-first mindset. “A common mistake is going to the retailer and talking all about the brand instead of starting out by saying, ‘Here’s what we know about you and your growth strategy, your strategic priorities and your strategic challenges, and here’s how we can help you meet those challenges.’ Another mistake is showing up with a program idea that’s too fully baked to allow for retailer input.”
Manufacturers with a good handle on consumer, shopper and category insights for their brands need to go the extra mile “to customize for the individual retailer’s shopper,” says Karen Sales, founder of Boise, Idaho-based sales and marketing firm KSMarketing and formerly vice president of shopper marketing at Albertsons.
Category comes before brand, insights inform the conversation, and each side helps solve the other’s long-term business challenges by pooling resources. According to Fitzmaurice, if there’s one question that drives the planning process, it’s this: “Where is there growth we could be capturing together?” Partners reach an agreement on activities that will drive growth for both of them, as well as financial and nonfinancial targets, relevant KPIs, responsibilities and timing.
The traditional 12-month planning cycle is too short for JBP. A time horizon of two or three years makes more sense “in the current landscape where so much can change in so many areas – commodities, shipping, e-commerce, media and measurement tools, supply chain, overall footprint,” says Sales. “Set a joint target and have a rolling plan you are working against with quarterly check-ins and annual reviews.”
Technology will facilitate collaboration and program management. Shared access to a dashboard, with a common scorecard, will allow for ongoing joint reviews of the plan’s execution. Both parties can track agreed-upon performance measures. When those metrics are below par, the team can take corrective actions.
The written plan is both the product of the process and the continuation of the process. In other words, the plan is a process. Based on mutual objectives and opportunities, it commits to writing the agreed-upon initiatives and activations; how and by whom they will be implemented; project milestones; expected benefits including return on investment; and performance metrics and results.
So parties can anticipate and react swiftly to changing market conditions, a joint business plan should take market trends and forecasts into account. Once the plan is deployed, partners continuously evolve it based on real-time results and market shifts. The retail industry is rocked by near-constant disruptors, and part of the plan’s purpose “is to adapt to those challenges and lay out how to positively leverage or counteract them,” Holcomb says.
Milestones include periodic check-ins when partners revisit the plan. “In most cases there’s usually an annual broader strategic alignment session followed by periodic check-ins on a quarterly or monthly basis to ensure we are all tracking and working against the collectively agreed-upon objectives,” McGowan says.
The performance metrics typically take the form of a joint scorecard with two sets of metrics. “One is the traditional category-health metrics of volume, sales and profit,” Chambers says. “The second set of metrics measures the progress on category strategies. These are specific to the strategy and may include metrics like trips, basket or shopper penetration.”
The financial benefits of next-generation JBP are evident on the scorecard, but beyond that are organizational benefits and – most importantly – benefits for the shopper. Many retailers and manufacturers have work to do before laying claim to those benefits or conferring them on the shopper. As Fitzmaurice sees it, the parties’ main problem is they’re not talking the talk, let alone walking the walk, when it comes to business planning. “Their discussions still focus on product and price issues instead of providing a better commerce experience,” he says.
Right now, few have mastered true JBP, says Brace, but that just means there’s a vast frontier with plenty of opportunity. “If you’re the first in your category to do it, you’ll gain a competitive edge,” he says. But hurry, “because that’s where the industry is headed.”
JBP 2.0 Cheat Sheet
Ante Up: What Both Sides Should Bring to the Table
• Cross-functional resources
• Applicable technology
• Shopper data
• Consumer and shopper insights
• Current and future category growth drivers
• Trends (industry-, technology- and shopper-based)
• Relevant intellectual property
JBP Best Practices for Manufacturers
• Show you understand the needs of the retailer.
• Give retailers an opportunity to influence programs. Don’t show up with “fully baked” programs.
• Share insights as to why shoppers do what they do inside the store, which stems from their life as consumers outside the store.
• Identify what is emotionally meaningful to the shopper relative to your brand, your category and the retailer.
• Translate those insights into stories that can be told in the retail space and other touchpoints along the shopper journey.
Source: Christopher Brace, Syntegrate Consulting
What JBP is NOT
• Handled at the buyer/category manager level
• Tactical trade negotiations
• Category management
• Promotional planning
• Short-term planning
• Brand focused