Winning at Retail: 6 Ways Brands & Shops Partner Up For Growth
Some years ago, I was part of vendor group meeting with a major retailer. Vendors were livid with the retailer’s habit of taking undeserved and undocumented deductions from payments. A representative of the retailer described the practice as “our terms of partnership.” At that, a frustrated vendor yelled out, “I’d call it institutionalized theft.” So often, partnership is an overused term but an underutilized tactic.
The retail environment is probably choppier now than in a generation. Retail closings set an all-time record in 2017. Scores of digital native brands are thriving outside of traditional retail. Big retailers have long since crossed over to online while Amazon opens traditional stores. Most brands are balancing omnichannel opportunities. While e-commerce grew by 16% in 2017, it still accounted for only 8.9% of total retail sales. Though 79% of consumers purchase things online, 65% would prefer to buy in a store, all else being equal. Consumers are still leaning on physical stores to meet their needs.
How, then, do the most effective brands and retailers work together for consumers?
In my work as founder of Bottle Rocket Advisors, co-founder and president of a sport products company, and as global strategy officer, VP marketing, and CFO at WD-40, I’ve visited more than 600 independent retailer locations and hundreds of other retailers in Asia, Canada, Europe, Latin America, and the US. It was a broad mix of retail types at all levels of success and struggle.
Along the way, I crossed paths with a distinguished group of retail and brand experts including…
- J. Beth Annon, past president of the National Bike Dealers Association with 20+ years of retail store ownership.
- Josh Boggs, veteran merchant and sales manager of Trek South Carolina.
- Sam Hoyt, owner of Maple Street Associates, an agency that guides outdoor retailers and brands in growing their businesses.
- Tim Lau, a long-time sales and category leader with brands like The North Face, Ex Officio, Timberland, and Yeti Cycles.
Altogether, we’ve worked with thousands of specialty retailers and spent time with even more consumers across multiple categories. We’ve seen that the most effective way for brands and retailers to win and retain customers is to work together. Here are six ways to forge true, mutually-rewarding partnerships.
Define the opportunities
Preparing for a new season presents a mad rush of logistics and factors to consider. As a result, planning discussions often get condensed down to transactional details. While that’s understandable, it also limits the possibilities to grow. An annual discussion to understand mutual challenges, issues, goals, opportunities, and executional capabilities should be part of the business planning cycle.
“True partnership benefits the retailer as much as the vendor/brand. Many brands think taking care of their business at a retailer is enough,” according to Lau. “You are not the only brand in that store and although your efforts are often appreciated, they’ll prove more successful when offered with an overall retailer viewpoint in mind.” Likewise, retailers need to see how they can help brands win too. A solid partnership empowers the vendor to do even more for their customer…and also involves more than just a commitment to buy from the retailer.
Specify roles and standards
With the rise of e-commerce and fragmentation of channels, consumers have many options where to buy. Often their choices are reinforced by the experience they receive. Delivering an exceptional customer experience goes beyond transactional details. It involve conscious choices by both sides. “Be specific about how you can work together for mutual reward,” Hoyt said. “Effective vendor partnerships are a two-way street with the ultimate goal to grow by serving customers together.”
After prioritizing the opportunities to pursue for the year, the next step is to decide roles and set standards. Marketing programs, communication, merchandizing, staff training, visibility, are all part of the path to customer retention. Spell those out for each party.
It benefits retailer and brand if the staff know the products in the store. “As the local specialty shop, you have to be the authority in the field. Your people need to know their stuff and they need to be willing and able to share it…in the store, in the community, at events, and on social media,” said Hoyt.
“Trek has a very extensive training program for retailers…including product knowledge, service training, and business development modules,” Boggs said. “Their goal – as it should be for most brands – is to empower the retailer with as much knowledge as possible, to make us the experts on their brand.”
Ideally, the staff should not only be familiar with the technical details of product, they should also have experience using it. Employee discounts can be one way to foster that connection. Offering deeper discounts as an incentive to those passing a product knowledge quiz can be a way to reward. Companies like Experticity can facilitate and automate brand education and retail staff trial programs.
“This gives our store employees a chance to use the product, and better understand the experience that we are selling,” Boggs said. “By making our associates brand ambassadors, we can use our own real-world experiences to better sell the brand to our customers.”
“Forming partnerships with manufacturers requires communication,” according to Annon. “Engagement with suppliers is just as important as customer rapport. Both take time and effort to get right for all.”
Obviously, some of the communication can be facilitated through CRM systems and shareable content in social media. And some of that requires a conversation. “Frequent, open and honest dialogue about what is working and what’s not; what is needed from both parties involved - having those honest discussions about the business, focused on making it better for all involved,” Lau said. “It’s not always about the retailers, nor vice versa.”
In either case, there’s huge value on both sides in scheduling those touchpoints to ensure that nothing gets lost along the way.
Like ‘partnership,’ commitment is one of those terms that is used more often than it’s lived. The beauty of taking a deliberate and methodical approach to defining the partnership is the commitment intention becomes crystal clear. “It is on the brands to provide the retailers with the tools to sell their products. It’s on the retailer to commit to the brands they choose to sell. It’s not just about cherry picking the best individual products, but rather developing a strategy for your retail space that is inviting and compelling for your customers; an environment that showcases your brands well,” Lau said.
The final piece is delivering for each other and the customer. Many retailers measure that delivery pretty well with vendor scorecards. The most effective partners take that a step further and use scorecards for the retailer too. Beyond the common measures, consider what would be needed to grade the effectiveness of all aspects of the relationship across functions and locations.
Consistency is key. “Brands should monitor their retailers to make sure that their message is consistent among different store locations,” said Boggs. “If a brand is trying to create a particular style or image, then all of their retailers should maintain that standard, regardless of location.”
At the end of the season, success can be judged by customers. The beauty of taking a deliberate and methodical approach to defining the partnership is that the clarity aligns retailers and brands in the best position to win those customers together.
For more about retail success, see my other article Winning at Retail: The 9 Habits of the Best.
Photo by Benoit Florencon
Mike Irwin is an advisor, blogger, mentor, operator, and strategist. Drawing from his past as a startup co-founder/President, executive officer of a $1+ billion market cap company (WD-40), public company CFO, VP Marketing, global chief strategy officer, head of sales, and board member, Mike uses his diverse background to help companies grow sales, improve profitability, and scale up. He serves as an advisor, consultant, fractional or interim CEO/GM/MD, and on boards of directors. Follow him at BottleRocketAdvisors.com, get in touch at firstname.lastname@example.org or connect on LinkedIn.