It’s a good news/not-so-great news situation for many ecommerce brands and retailers.
The good news? Ecommerce sales are gaining ground. According to Forbes, digital sales are on track for 8.8% growth in 2024.
The not-so-great news? A recent Gartner survey found that marketing budgets are trending downward, with CMOs reporting a 15% reduction on average.
Add in the seasonal nature of many ecommerce sales efforts, and this creates a challenge for both brands and retailers: How do they reach more potential customers with fewer resources?
Joint business plans (JBPs) offer a solution. Here’s what companies need to know about JBP basics and its benefits, what steps and best practices can help build better plans, and what industry experts say about keeping joint plans on track.
A joint business plan is a collaborative strategy developed by brands and retailers that defines short- and long-term goals to improve marketing and sales efforts.
Todd Hassenfelt, senior director of global digital commerce, strategy, and execution for Colgate-Palmolive, defines joint business plans as "collaboration between brands and retailers to set short-term and long-term expectations aiming for mutual ROI [return on investment], category growth for retailers, and volume and share growth for brands.”
It’s worth noting that there’s no one-size-fits-all for joint business plans. Larger organizations may have the resource and personnel bandwidth to create in-depth documents that cover a host of potential outcomes in detail, while smaller companies may opt for what’s often known as “JBP lite.”
A scaled-down version of joint business planning, the lite approach leverages informal conversations and identifies one or two specific goals for companies to meet. This approach reduces complexity without impacting the benefits of the business plan.
There are several benefits of building a joint business plan, including:
Brands and retailers may inadvertently work at cross-purposes for their ecommerce marketing and sales strategies. For example, if retailers heavily market a feature that won’t appear in the next product version, they could inadvertently hurt sales.
By creating a joint plan, brands and retailers can create and develop goals that benefit both businesses simultaneously.
Working together on business plans also clears the way for a greater return on investment. Consider a brand just getting ready to release its newest product version. By providing retailers with details on this new release before it goes live, sales and marketing teams can create campaigns to boost consumer interest and drive strong initial sales.
Shared responsibility for success also means shared spending. For example, ecommerce marketing teams from brands and retailers can work in tandem to create cross-functional campaigns that are less costly for both companies but deliver the same results.
The best JBPs don’t just happen — instead, they’re the result of hard work from both brands and retailers. This hard work begins when staff from both businesses meet for the first time. Here are five steps to help run successful meetings.
Brands should set the stage with details about current market conditions; category wins and challenges; and growth opportunity predictions. It’s also worth providing an overview of brand operations both individually and with the retailer.
Retailers are up next. Their role at this stage of joint business planning is to provide details about current performance relative to other retailers, along with information about shopper demographics and preferences.
With common ground established, retailers and brands need to define and decide on joint objectives. This could include improving audience personalization, identifying and using the ideal advertising mediums, or creating more effective ways to track and measure sales success.
Emerging trends are next. What’s happening in the market right now? What’s on the horizon? And how do current and evolving trends impact sales volumes, product pricing, and new ad campaigns?
Finally, it’s critical to specify key performance indicators (KPIs) that help measure sales performance.
Common KPIs include:
Several best practices can help keep plans on track and reduce the risk of costly mistakes.
First, keep goals SMART: Specific, measurable, achievable, relevant, and time-bound. This helps reduce the risk of “scope creep” (i.e., a project’s scope grows uncontrollably), which often happens when businesses brainstorm great ideas. By using the SMART framework, companies can ensure goals remain focused.
Next, be prepared to act quickly. Retail trends emerge and change quickly, making agility a critical component of customer engagement and sales success.
Finally, make omnichannel a priority. Businesses need to meet consumers at their touch points of choice, not where they’d like them to be. By creating and maintaining omnichannel experiences, it’s possible to enhance customer engagement and keep buyers coming back.
“The goal is to get to less specialization and more of a well-rounded omnichannel expertise because both sides need digital and in-store to work together,” says Jenn Smith, director of omnichannel national retail sales at Bacardi.
While no two JBP’s are the same, there’s no reason to reinvent the wheel. Here are four tips from industry experts that can help companies streamline the plan-building process.
According to Santiago Lopez Mora, general manager of ecommerce and digital marketing for Just Play Products, JBPs are about “making sure we are all thinking about the business in the same way and getting [the] closest we can to alignment while addressing major challenges.”
Accomplishing these goals is only possible if brands and retailers are willing to listen as much as they talk. The more they understand about each other and the challenges they face, the better.
Frank Mulcahy, head of sales for Chewy Advertising, sees joint business plans as “a multifaceted collaboration with your vendor to negotiate a multitude of items for the year of which advertising is but one of them.”
The main word here is “collaboration.” Joint business planning isn’t about brands laying out requirements for retailers, or retailers asking brands to change their approach — it’s about sharing data on what works, what doesn’t, and what needs to change.
“We define joint business planning as working with retailers that are our major players in terms of sales volume, and if we achieve ‘X,’ we will invest ‘X’ percent toward marketing,” says Nia Mack Rodney, senior omnichannel manager at KIND.
These X’s are critical for transparency — by committing to specific actions or tied to specific spending, joint business plans are better prepared to meet the challenge of changing markets.
For joint business plans to work, companies need to know what’s at stake and who has a stake in making it happen.
Consider The Home Depot, which created a more collaborative JBP process by getting everyone involved in the effort together in one room and asking them what a “good” process looked like. Companies can better meet the needs of disparate stakeholder groups by taking a multi-departmental, multi-perspective approach to joint business planning.
With the right approach, joint business plans can improve outcomes for both brands and retailers.
Put simply, while the plan is important, people are the priority. Good plans are built on transparent data exchange and clear goal setting — great plans are created when cross-company teams work in tandem toward collaborative sales and marketing outcomes.