Vitabiotics chief executive and Dragons Den star Tej Lalvani has called for a “retailer-supplier relationship reboot”.
Lalvani said both parties should learn from the example of Apple, which as both a retailer and supplier suffers “very little dilution of the brand message from board level to store level.”
Speaking at Retail Week Live, Lalvani said: “There is a lot we can learn here, but this is why it’s more important than ever for retailers and suppliers to work closer together to build a relationship, to collaborate, to share customer insight data and build branding within a store.
“Action must be taken now because, speaking as a manufacturer of a branded good that has national awareness, it is making more financial sense to sell online, especially with the downward pressure on pricing being passed onto suppliers.
“It shouldn’t be about trying to grab margin to boost short-term earnings, because ultimately margin is a zero-sum game. If you take it from somewhere, there is a major sacrifice somewhere else – I invest heavily in product quality, manufacturing, research and development, and a hell of a lot of money in marketing. That differentiates my products and drives people into store.
“But if I have to give up margin, I have to sacrifice one or many of my product attributes, which makes it less unique, more commoditised and has a negative impact for both retailers and suppliers.”
Vitabiotics in launching in the US through a supply tie-up with pharmaceutical giant Walgreens.
Lalvani said that was his preferred route to market ahead of an online ecommerce launch, because of the “amazing reach” Walgreens can provide across its vast store estate.
He insisted retailers can continue to “play an important part” in the future of brands, despite a growing trend for suppliers to sell direct to consumer.
Lalvani said: “What we don’t want to see is a lot of suppliers turning away from the retail model and going their own way online.
“It’s ultimately about innovation in the retail sector and working with suppliers around how that can be done.”