Business SMART:

Are You Really Retailing?
 

By: Dennis A. Conforto
A-Z Media Group

Retailing is really one of the hardest jobs on Planet Earth, not only for the retailer but for the manufacturer as well. Retailers have to be experts at selling everything in their stores, while manufacturers need to be retailing experts at selling their particular products.

Obviously, if you are an independent retailer or retail chain, you’re in the retailing business. Of course, just calling yourself a retailer does not necessarily mean you’re truly retailing—but more about that shortly.

If you are a manufacturer, you might not consider yourself a retailer, but you should if you want to control your brand within retail stores. To measure how good a “retailer” you are, ask yourself this question: How much square footage of retail space do my products occupy within the United States, Canada, Australia and the United Kingdom? If you don’t know the answer, you may be facing some challenges. You may need to become more adept at retailing your products, and you may need to re-evaluate best practices in terms of your partnership programs with retailers.

When I speak to manufacturers who know how much retail square footage their product occupies, I know I’m talking to manufacturers who know how to manage their brands, right down to each individual retail store. Brand management isn’t something that happens in a corporate office; it happens within every retail store.

One of the most important retail aspects for manufacturers to control is the display of their merchandise. As a manufacturer, you know how your retail displays should look to get the highest sales per square foot. Hopefully, you’re providing your retailers with plan-o-grams of what your displays should look like. In doing so, they’ll be less likely to cherry-pick your line without knowing why your product mix was created in the first place. You should also be sharing with each retailer how every product within your mix helps sell all the others.

Oddly enough, plan-o-grams are SBP—standard business practice—for any manufacturer who wants to do business with the major national chains. Yet, there are far more independent retailers out there for manufacturers to court than are in any national chain. Therefore, it stands to reason, if manufacturers followed the five-step partnership program outlined by The SMART Group, they’d have more business with independent retailers than they could ever do with the national chains, with less risk and more reward.

So, why don’t manufacturers do it? Well, because it’s hard work. Selling to independents incorrectly is easy, but any results are short-term, and that only serves to weaken both the independent channel and the manufacturers who were too lazy to do it right from the beginning.

In today’s environment, it’s not enough to be great at selling your products to retailers. Manufacturers also have to be great at helping retailers sell their products to consumers. As a manufacturer, the better you are at executing these two objectives, the more powerful your product offerings become. Because, at the end of the day, being in tune with retailers is fine, but it is being in tune with retailers’ customers that really counts. Everything in business today is about creating better and more powerful relationships. The better the relationship is between manufacturer and retailer the better sales and profits will become.

One way to bolster that relationship would be to provide your retail base with examples of call-to-action ads for their specific markets. You might have those ads on your website so retailers could tap into your great promotional ideas. You could even provide an ad schedule showing when each ad should run.

Manufacturers committed to their own success must first be committed to the success of the independent retailer. Without the success of this one channel, the rest of the industry is greatly weakened. Manufacturers may look at a partnership program as something as simple as giving a discount to a group of retailers, but if I were in retail today, I’d rather have a manufacturer help me turn my inventory faster. I’d rather have a plan-o-gram than a discount. I’d rather have ad slicks for my store and matching co-op funds than discounts.

Discount programs are not partnerships. They are the industry cocaine; the cheap thrill in a false relationship between a retailer and a manufacturer. Only true partnerships help all of us understand that we’re all in retail, no matter what our place is within the industry. Understanding that is what being Business SMART is all about.