In most other markets, retailers and brands are able to develop co-beneficial partnerships based on their ability to share information. Sephora, the world's leading specialty beauty retailer, shares point-of-sale and inventory details with supplier brands, allowing for vendor managed inventory partnerships that save time and generate more profitability. Empowered by data, brands can control costs, grow market share, and increase sales at an influential retailer like Sephora. In the cannabis market today, there is an overload of communication around maintaining the buyer-brand relationship, but very little exchange of real-time data between retailers and brands.
We've discussed how sharing sales data can improve inventory management, product branding, and retail synergy by identifying target customers that brands and retailers have in common and then focusing on how best to serve those customers with our marijuana vendor managed inventory system. Sharing data between partners also creates a sense of transparency, which leads to a circle of trust. Trust enables co-beneficial partnerships and improved relations between brands and retailers. When brands and retailers trust each other to act in the best interest of the partnership and of their shared customer base, they will do more volume together, opening the door for retailers to negotiate partnership agreements and improving communication efficiency throughout the supply chain.
Retail-Brand Partnership Agreements Become Possible
Establishing trust in a relationship takes transparency and time. Proactively sharing information via a marijuana vendor managed inventory agreement is one way to create a sense of transparency and if the information is consistently shared over time, a circle of trust is established among partners. Referencing real-time data gives both brands and retailers tools to drive down costs and improve efficiency, leading to purchasing agreements that are beneficial to both parties.
The opportunity arises for Vendor Managed Inventory (VMI) agreements when the flow of communication switches from brands constantly asking retailers questions, to retailers proactively communicating data to brands. Retailers can ask for perks like lower unit costs from brands in exchange for access to data and, eventually, form marijuana vendor managed inventory (VMI) agreements. Insights from retailers' AskTreez analytics reports can be leveraged to arrange terms that pay off vendors on consignment, or as products sell (rather than the typical COD, NET15 or NET30) because all parties are looking at the same data and charts and therefore know what payment amount would be due at what time. Establishing retail-brand partnership agreements creates more profitability for the brand and the retailer through reduced unit costs for retail, more volume for brands, and reduced labor costs for both retailers and brands.
Improved Retail-Brand Communication
Currently, there is an excess of inefficient communication between brands and retailers that could be remedied with marijuana vendor managed inventory agreements. Retailersâ€™ procurement teams easily spend hours a day fending off requests from brands for sales and inventory data. On the other end, brand reps are spending at least 30 minutes a week, per retailer, trying to get this information and coordinate orders through text, phone calls, and email. When retailers attempt to share information, they are subject to manually sorting through data, cleaning it up, and then sending it to brands through a variety of different channels. These inefficient methods make communication a time-consuming and painful process - but it doesnâ€™t have to be that way!
AskTreez helps define a single communication channel by generating automated, real-time marijuana vendor managed inventory reports that retailers can easily share through the dashboard by granting access to other Treez partners or export and share with partners who are not on Treez. Granting access to reports lessens the volume of communication from brands, and brands can use this tool to develop proper communication cadence with their retailer. Instead of brands making two calls a week to the retailer to get sales and inventory info, they can schedule a single weekly call that is driven by real-time performance data.
When both the retailer and brand have access to the same inventory insights, they can collaborate to identify products with the highest potential sales lost and adjust ordering and delivery schedules to avoid stockouts on high performers. Referencing the same marijuana vendor managed inventory reports gives both brands and retailers the tools to have meaningful conversations about actual performance, resulting in simple and to-the-point conversations and reducing the chances of misunderstandings. More efficient communication frees up time that can be spent improving other areas of the business.
Ultimately, this refined communication will make brands into better partners because they are proactively getting the useful information that they're looking for. When retailers partner with brands and distributors by sharing information, they will drive the cannabis industry forward by lowering costs, maximizing efficiency, and improving brand retail synergies.
Get a leg-up on your competition with the insights and marijuana vendor managed inventory reports available through AskTreez. If you're already powered by Treez, ask your Customer Success Manager to get you set up on AskTreez.