Retail Adversaries Seek Common Web Ground

An old battle between retailers and consumer goods manufacturers about who owns the customer has gotten in the way of shared Internet marketing initiatives.

An old battle between retailers and consumer goods manufacturers about who owns the customer has gotten in the way of shared Internet marketing initiatives.

While retailers and manufacturers continue to tussle over control of customer information, new Web initiatives such as may benefit both sides — as well as customers.

Makers of consumer goods want access to customer data from retailers so they can design more focused campaigns. But retailers are wary about sharing data, fearing the manufacturers will use the information to steal customers.

"Theres really a brand war going on," said Steve Smith, vice president of the business innovation service group of IBM, where he works on programs trying to bring retailers and manufacturers together to do more effective marketing.

So far, no one has found a business model that uses shared data to simultaneously increase brand loyalty, store sales and customer convenience.

"In the marketing, they havent gotten together," said Gartner analyst Lora Cecere. "They dont have a win-win value proposition."

But recent efforts show Internet technology may provide these traditional adversaries with a new incentive to work together.

"More and more, both retailers and manufacturers want to understand their customers better in the context of customer relationship management," said Gartner analyst Walt Janowski.

Working together would enable companies to roll out new products, reduce promotional costs and run more effective campaigns, he said.

Competitors Cooperate

One web site, FamilyTime, acts as a proving ground for consumer goods makers to test new marketing and promotional tactics alongside competitors. Its developers want to reach out to retailers.

A busy parent can go to the sites recipe section to find quick meals to prepare, bumping into ingredients from sponsoring companies such as Campbell Soup, Frenchs, McCormick & Co., The Procter & Gamble Co. and Tupperware Worldwide.

Behind the scenes, FamilyTime tracks the most popular recipes. Another part of the site will add the products to a shoppers list.

These manufacturers learn who wants to buy what kind of products, because each user has to register. They track which recipes are e-mailed to friends.

While FamilyTime currently caters only to manufacturers, company managers will build Web sites or portions of what they offer for other companies, including retailers.

"Were definitely showing evidence of increasing brand loyalty," said Pat OBrien, CEO of FamilyTime, a private company. "The next horizon is into relationship marketing," where consumer goods makers market through retailers all the way up to the cash register, he said. "The win-win is when retailers are rewarded with loyal customers."

FamilyTime is working with IBM on ways to help consumer goods makers and retailers work together, he said.

And spice distributor McCormick is pursuing partnerships with retailers, said Ginny Maycock, director of Internet marketing. "Were at the early stages of this. We try to find a mutually beneficial program that doesnt violate privacy," Maycock said.