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Business SMART: |
Retail
Co-Op Marketing Groups |
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By:
Dennis A. Conforto
Chairman & CEO of A-Z Media Group, Inc. |
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The SMART Group has
already overseen the creation of several Co-op Marketing groups
across North America. Each of these regional groups has begun to
make headway in the area of cooperating first and competing
later.
No question about it, it’s a challenge to get retailers who a
few months ago saw each other as bitter rivals to now sit at the
same table and learn the art of cooperating first before they
compete.
It’s been an interesting process to watch how each regional
group has established a different set of priorities and a
different view of what it means to cooperate. Let me share with
you some of my observations:
One group decided that creating a tabloid to use as an insert in
each participant’s marketing attempts featuring common products
they all carried was the way to begin cooperating. It has forced
each store to see what they have in common with each other.
Their co-op model calls for several manufacturers to partner
with them to try and reach over one million consumers. What is
interesting is that a group of 8 independent retailers and
approximately 4 manufacturers will reach more consumers than 80
manufacturers and 400 independent retailers will in any of the
traditional scrapbooking publications. I find it fascinating
that this small group of retailers has built in a few months
what took the whole industry years to build. What’s even most
astounding is that it has the potential to be more than 4 times
more effective and will cost everyone less money than
traditional advertising mediums.
The funny thing is that this group of retailers doesn’t really
even see what they are about to accomplish. Even more important
is the fact that they will reach more new consumers than any
other combined group within the scrapbooking industry.
Another group decided that they wanted to run a joint newspaper
ad that featured only one manufacturer and that listed 8 or so
retailers carrying that manufacturer’s product line. While it
won’t reach as many new consumers it does drive the cost of
advertising down for everyone. All who participate get to reduce
their cost and generate more awareness for the scrapbooking
category.
Another group of independent retailers voted for a chairperson
of their group who is an online retailer without a store front.
Who would have ever thought independent store owners would vote
for an online retailer to be their chairperson?
Which one of these groups is going about it the right way? The
answer is, all of them. They are all practicing, at one level or
another, the art of co-opetition, which is to cooperate first
and compete later.
What is the basic element that makes SMART Co-op Marketing Teams
work? In one word, it is trust!
In some cases those who have been building these cooperative
teams have been somewhat frustrated because those retailers who
are in the same market and not part of one of these groups are
sure that somehow and in someway, someone is going to benefit in
an unfair way. Rumors start to fly that have no truth and trust
can be destroyed.
However, as the marketplace continues to soften, and fewer new
consumers are coming into the stores, retailers will be forced
to be more trusting to help grow the whole marketplace for all.
We have to trust each other because, as an industry, we must
replace those that are now at the end of their active
scrapbooking time with new consumers.
The best time to change to improve is not when everything is
going wrong but when everything is going right. When I first
shared with retailers and manufacturers that which would come to
pass, I was met with great resistance. It’s not fun to tell
everyone the marketplace is going to change and we need to
change now if we want to thrive and not just survive. It was
hard because at the time everyone was riding sky high and the
message was rejected.
Many got the message but it was too late as they watched their
businesses slowly fail. Others are beginning to get it and now
understand completely that mutual trust and respect is the only
way to grow the industry today. Those that promote distrust of,
or between manufacturers, retailers, online stores,
distributors, specialty chains or the Wal-Marts of the world
simply don’t understand the free-enterprise system.
None of those market channels to the consumers are going to go
away. The consumers keep them alive because there are consumers
who favor one channel over another. Since none of those market
channels will completely die off, the best thing for everyone is
to simply cooperate to grow the scrapbooking marketplace. The
differences between each party are petty. It is what we have in
common that can help us grow the market to its full potential.
At the end of the day, everyone wants to be trusted, but to be
trusted you have to extend trust. It is my hope that the
industry will simply learn to trust those that seek to cooperate
with each other. It would be foolish to attack the idea of trust
with distrust and kill ideas that have already been proven time
and time again in many other industries. Lack of trust has not
served the industry well, and I believe that trust will. Trust
is one of the principles of what being business SMART is all
about. |
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