Retail SMART

Co-Opetition Means Greater Profits
 

By: Dennis A. Conforto
Chairman & CEO of A-Z Media Group, Inc.


For the month of October we are discussing the business principle of co-opetition. Co-opetition is the ability of companies that compete to also cooperate with each other for the greater benefit of the whole. If there is an industry built for co-opetition it is the scrapbooking industry. Sadly little co-opetition has occurred within the industry. The good news is that there are signs that co-opetition is starting to happen.

There are some great examples of retailers within the same marketplace starting to cooperate in joint advertising - just like they do in the auto industry for large auto retail centers. This is good, because when they really cooperate they both expand the marketplace for both retailers.

For the last 8 years or so, independent scrapbooking retailers have been taught by some organizations that they need to wage war and protect their marketplace from any competitor within 25 miles of their stores. These kinds of protective business philosophies never really work in a free enterprise market, other than to shrink the businesses that practice this philosophy.

We are now starting to see manufacturers, distributors and publishing companies come together and cooperate like they have never done before. And this is good news for an industry that is still very young. It is also good because the failure rate of independent retailers is at an all time high. In truth, the industry is in crisis but few really understand why or what they need to do to stem the tide of increased business failures within the industry.

One thing is for sure: the lack of co-opetition is one of the major reasons for the increased failure rates within the industry. One of the bright new organizations to emerge within our industry is The SMART Group, which has a three-pronged mission to Propagate, Integrate and Educate to enable the industry to perform at its very best.

The SMART Group came up with an idea that really shows what an industry can do when they truly cooperate. The idea is the CHA SMART Store powered by the SMART Group at the 2006 CHA Winter Show in Las Vegas.

At the Winter CHA Show The SMART Group will demonstrate how retailers, manufacturers, distributors, publishers and service providers can come together to create something that will make a huge difference in the industry. This will be demonstrated through the creation of a free-standing 3,500 square foot SMART Store that will be given away to one lucky retailer.

For the first time, 70 competing manufacturers are coming together to show how they can cooperate and work on something that is really needed for not only the retailers but for the manufacturers and the industry as a whole. The SMART Store is not just about how to display and what to display. Rather, it is about how to produce real and meaningful profits for retailers and manufacturers. The store will be a reflection of how companies should work together to achieve even higher results through real partnerships.

There will be eight classes that will be taught to explain how a SMART Store really works. Among the topics covered in these classes will be:
1. What are the profit drivers?
2. How can you be more promotionally-driven?
3. How can you increase the average size of a transaction?
4. How can partnerships really work between manufacturers and retailers?

The store is a powerful statement of cooperation and the classes will be a powerful collection of proven ideas. Everyone will benefit, no one will be favored, and the industry will be better served. And that is what being business SMART is all about.