If you think it’s so easy why don’t you do it yourself? Okay I think I will.

Implications: And they are. Whether it’s manufacturers opening retail stores or retailers getting into the manufacturing business, it’s happening, and it’s working. Apple, Sony, Nokia, and Bose retail stores; Sear’s Craftsman, Safeway’s Organics, Best Buy’s Insignia, Costco’s Kirkland brands are a few good examples of where it’s working.

Analysis: While there will always be barbs traded back and forth about creating competition with their best partners, the truth is manufacturers with storefronts are getting a greater appreciation for retail challenges and the value of their best retail partners, and retailers are becoming more savvy when it comes to product development, manufacturing and supply chain challenges.  Applied properly this knowledge and understanding can create better partnerships and shared success.

When a manufacturer opens an effective retail store they are creating incremental market awareness and buzz around their brand, which should be to the benefit of all the retailers that carry that brand. Equally as valuable, manufacturers can test designs and displays and use early results to adjust before taking to retailers for mass adoption, hopefully avoiding ill conceived, albeit well intentioned, displays or other requirement for retailers that end up wasting everybody a lot of time and money.

When a retailer with a strong brand creates a successful product brand, they create additional value and yet another reason to shop at their store. Insignia, and Kirkland brands generate significant volume and profits for Best Buy and Costco respectively, but also add to their value perception as a retailer, which results in bringing more traffic into their retail stores giving greater visibility and step-up selling opportunities to the other brands within the store. And, retailers become much more knowledgeable and a better partner in helping suppliers design better products that hit the right price points, and remove waste from the supply chain. After all retailers do have the inside scoop on what consumers are both asking for and complaining about – they should be applying that knowledge.

Bottom line, whether the retailers actually gets into the manufacturing business or uses the threat to apply pressure to their suppliers to design more compelling products, role reversal can help keep things honest, and help improve the partnership between retailers and their manufacturers. Done incorrectly it can be a disaster for brands and bottom lines.