OPPORTUNITES FOR WHOLESALERS AND BROKERS

MATT NANNERY

Some wholesalers and brokers are concerned that direct manufacturer-to-retailer alliances could leave them watching the development of Efficient Consumer Response from the sidelines.

But Betsy Tucker, a consultant with Chicago-based Retail Systems Consulting, said she believes otherwise.

Tucker said wholesalers and brokers should use their expertise to make sure independent grocers are technologically proficient enough to participate in continuous replenishment initiatives. In addition, both wholesalers and brokers have a major role to play in making sure that manufacturer-initiated alliances with retailers don't result in fewer brands on the shelves, she said.

"I'm not so sure brokers and wholesalers are going to get edged out by the large manufacturers" in the move to ECR, Tucker said. "These groups are important because ECR involves a philosophical change from push to pull marketing. Wholesalers and brokers have to be there to provide the products that consumers really want."

Tucker's comments should be welcomed by wholesalers, brokers and retailers, many of whom have expressed fears that once strong continuous replenishment relationships are established between suppliers and retailers, some manufacturers would use them to extend their own lines and take share from smaller manufacturers.

Tucker added that there may be a limit to the number of one-on-one replenishment relationships with retailers that manufacturers can handle -- pointing to the fact that even the current confined tests have not been easy to manage.

"It might be more efficient for the vendors to manage replenishment -- and they should do it if that's what's best for the industry. But eventually it will be interesting to see how many continuous replenishment partnerships they can actually handle," she said.

The established links wholesalers and brokers have to multiple vendors could prove especially important should manufacturers find they've bitten off more than they could chew, Tucker said.

Brokers, who are for the most part regional, could also aid in furthering industry ECR initiatives by catering to consumer preferences in the regions they serve.

Besides making sure that product variety is not hampered by individual manufacturer-to-retailer replenishment partnerships, wholesalers can help independent grocers make sure their point-of-sale data is a clean, accurate reflection of actual purchasing, Tucker said.

"Now wholesalers focus on warehouse scanning codes, but they have the technical expertise to help independents make sure their POS scanning is accurate," she said.

Brokers can also help independents become technologically proficient, Tucker added. She said brokers should align themselves with value-added networks, or VANs, to assist the retailers they serve handle electronic data interchange.

"Brokers will have to get up to speed on some technologies they don't know a lot about," Tucker said. "By working with VANs, retailers won't have to customize their programs to work with manufacturers' EDI systems."