Retailbound offers retail coaching, retail consulting, and managed marketing assistance to manufacturers who want to sell their products to retailers. At Retailbound, we have a passion for retail, which enables us to provide the very best insights and solutions for you.
One of the advantages of working at a full-service retail management firm is that you see all sides of unique challenges and situations consumer brands face when trying to prepare or execute retail initiatives.
Of course, there are recurring themes, and one of those themes is misaligned expectations with performance based partners or agents.
How are Expectations Misaligned?
Generically speaking, the 3 most common expectations that many brands have for performance based retail partners include the following:
They have “skin in the game” and will work harder to push sales
There’s zero financial risk to the brand because of sales-based compensation to partner
Buyer meetings and sell-in (1st purchase order to new account) will equate to bottom line revenue goals / ROI
“Skin in the Game” ≠ Reliable motivation or sales
What’s true about the best sales agents, distributors, and other performance based partners?
They have many product SKUs to choose from and allocate limited resources according to what sells the best and easiest. It’s easy to be ignored or set aside as a new brand.
Many new product companies are smaller teams of designers, engineers, or developers who see their product as their baby. Will everyone else love your baby the way you do?
In many cases, when a product isn’t truly ready for retail or the brand isn’t supporting sales / marketing efforts as they should – performance based partners are pretty quick to allocate attention and resources elsewhere.
If it takes too long for your “baby” to walk, it’ll get left behind.
Zero Financial Risk with Sales-Based Incentives
When you’re a young brand, budgets are tight, the team’s bandwidth is limited, and every decision could be life or death for the company.
When taking the plunge into the retail space, many of the assumptions of the Amazon world are brought along for the ride. Fast turnaround to place product on the platform, pricing is correct, existing marketing tactics will work, supply chain is set up correctly, etc.
Retail takes longer, is more expensive upfront, requires more actual conversations (with real people), has a different financial structure, and accordingly has greater consequences should you make an error.
I won’t get into all of the differences on this post, but these assumptions moving from Amazon to retail are often what lead to the misaligned expectation for risk that a brand sees when bringing on performance-based partners.
What do I mean exactly when I say risk?
It’s not rare for a brand to spend 6-12 months after launch to earn their 1st purchase order with a noteable retailer. What happens if negotiations fall through, retailer demands more than you can handle, or your partner decided 3 months ago to stop pushing the product altogether? You’ve successfully wasted 6-12 months of time. And a lot of money.
Brand signs a distributor with many relationships, resources, and personnel. Great! Now the distributor expects you to actively participate and allocate funds for marketing efforts. How effectively are these funds used? Do you have these resources? Often times brands don’t know which marketing levers to pull.
Purchase Orders ≠ Bottom Line Revenue
You’ve made it! You earned a $500,000 purchase order from a larger retailer. However, after using a performance-based agent to get into retailer, after 2 months the retailer is finding it difficult to sell all of your products. Perhaps due to poor marketing. Perhaps due to mismanaged forecasting. Who knows?! The result is not positive either way.
Guess where that inventory is likely to go? Straight back to you. Now you have $250,000 in inventory / additional overhead sitting idle in your warehouse.
In the world of startups and building a new brand, investors and business owners can get caught up in short-term milestones and large purchase order deals while forgetting about who is really in charge of your success… the consumer!
Have you seen these types of misaligned expectations happen with brands before? I’d love to hear any stories or comments on your experience or perspective of brands (perhaps yours) making the jump into retail.
At Retailbound, these often-unknown risks are why we’re in business today and why brands decide to leverage our risk-averse model for retail growth.
Interested in getting your product in retail or need help with managing your retail channels, contact Benjamin at email@example.com.
At Retailbound we work with consumer brands – both large and small – who are either launching a new product in retail or trying to position themselves more competitively in the space.
Some obvious topics most companies think about (and sometimes get right) include pricing, packaging, promotional strategies, and which channels they’d like to place their products.
This article is not about the obvious, but instead is an attempt to describe unseen challenges or the minutiae (as my boss Yohan would say) revolving around taking a brand from 0 to hero at retail.
Traction Takes Longer than You Think
Brands launching a new product in retail should be prepared to stick it out for 6, 12, 18 months before scaleable channel partnerships are in full swing. Every situation, product, and team is different – but it never ceases to amaze me how many young brands expect to get signed up with a sizeable retailer in a 1-4 month time frame.
It takes a lot of effort for retailers to plan and organize their assortments. For example, much of the spring and summer camping / outdoor retail decisions arealready finished for 2019. A good time to start initiating retail conversation would’ve been around Q3 2018 or earlier.
Trying to get into some retail channel for the holidays? Better start before July…
Forecasting Sales with Limited Data
I’ve talked to many brands who get production finalized, establish a few retail distribution partners, and suddenly find themselves running out of inventory or sitting on too much inventory. Retailers hate surprises. You might assume communicating supply and demand expectations would be a top priority – but many brands stretched bandwidth drop the ball on this.
You might be happy that you sold out… but often times the retailer is not too thrilled (unless this was made transparent ahead of time).
Starting with some e-tail accounts, specialty, or a 20 store test can be a great way to gather data on sales velocity, supply chain, marketing effectiveness, etc. You’ve got to start somewhere. Just make sure everyone’s on the same page.
Marketing Awareness at Retail
Who knows your products best? Probably you!
Never assume a distributor, external sales agent, or retail partner is willing to commit time or energy to your specific brand or product. You’re not a Sony or SC Johnson – you’ve got to prove yourself continuously. And if you’re not willing to commit resources to do so, that partner will move on to another brand that can.
That means understanding the best times of year to promote and spend your limited marketing dollars. Measure the results. Understand what marketing “levers” are at your disposal and how competitors or similar products are utilizing them. Video influencers, print ads, online deal spots, bundles, POP displays, etc.
Overall Operations – What’s Your Time Worth?
This is the silent killer.
It’s not uncommon for a brand – startup or established – to spend 3-6 months developing a go-to-retail plan and taking a learn-by-doing approach (which is subject to burning bridges with potential retail partners).
It’s not uncommon for brands to take a “performance-only” approach with new sales partners only for the brand to realize they’ll have to commit marketing, training, and human resources to ensure those partners’ success. Without those resources implemented, it’s almost always a waste. I’ve seen a number of brands we work with waste 3-9 months in these “risk free” partner scenarios before bringing us on to turn things around.
It’s not uncommon for a brand to spend 1-3 months negotiating small details with a distributor when the deal should’ve taken only a couple weeks at best.
Before many brands know it, they’ve spent 7-12 months simply trying to get to the starting line due to something that’s intangible and often unsung >>> experience.
Feel Like You’re Wasting Time?
Let’s get in touch and see how we can accelerate your retail traction, save time managing operations, and position your brand competitively. Contact Benjamin Ertl, our Director of Business Development by phone at 715-820-3057 or by email at firstname.lastname@example.org
Most tech brands, regardless of industry, have asked themselves this question at least once: how can I continue to earn consistent media coverage when either:
Our brand isn’t launching a new product for several months?
There’s an unexpected delay in product availability?
While you might think it’s a good time to wind down on your public relations efforts until the product is ready, this is a great opportunity to create compelling, non-product-related content to push your brand forward. Here are 5 ways to earn those high-value headlines:
Uncover Seasonal Outreach Opportunities
Major holidays and events such as World Health Day, Black Friday/Cyber Monday or even Pi Day offer timely opportunities to insert your brand in relevant conversations that are already happening in the media.
For example, is your lead product engineer a woman? Women’s History Month would be an ideal time to pitch Forbes on a round-up of successful women in the STEM industry, while offering your engineer for an interview. Does your brand have access to interesting data on its customers’ shopping behaviors around the new iPhone announcement? Top tier outlets such as CNBC, Recode and USA Today are known to post about this topic, and are always keen to receiving unique information to add to their stories.
Create an editorial calendar to keep track of opportunities your brand’s employees, expertise or data could add value to.
Develop Contributed Content That Sets You Apart from Competitors
Contributed articles authored by your employees who can offer credible, third-party perspectives are a great way to land non-product placements.
By keeping tabs on what is most interesting to consumers within your target media outlets (look at which articles are receiving the most comments and are being shared most by readers on social media), you can create timely, compelling story angles based on what’s currently trending as it relates to your industry, products and/or area of expertise. For example, you might offer a piece on what to do after successfully completing your first round of funding or how to best capture retailer attention. Use experiences, data and tips as supporting content.
After developing your article idea, pitch it to a relevant publication that will help you reach key stakeholders such as retailers, B2B prospects, target users, etc. Each article should be exclusive to an outlet, so be sure to pitch your top target first, and move down your list as you hear back (or don’t) from editors.
Submit Your C-Suite for Speaking Opportunities at Relevant Industry Events & Tradeshows
Research the top relevant industry events and tradeshows, and find speaking opportunities at each, whether a keynote, panel or even hosting your own session with a small group of attendees. To determine whether an event is worth considering, look at the list of past speakers, attendee numbers from recent years, retailer attendance and media attendance and coverage from the show.
Larger events such as CES, Web Summit, IFA or TechCrunch Disrupt require lead times of at least six months, so be sure to research these at the beginning of the year and finalize event plans as soon as possible or register to be notified once the next call for speakers opens.
Create Interesting Data Stories
To extend brand coverage outside of the product review cycle, produce non-product-related content that can be pitched to journalists interested in the topic. This would help differentiate your brand from competitor coverage, offering journalists an additional valuable asset on your specific industry.
One example is surveying users of your target audience to find interesting, unique data about common behaviors associated with your product category and everyday life (e.g. the use of headphones in the workplace). If your brand offers a software product, it’s also worth pulling anonymized data from your user base and brainstorming several storylines and angles to help highlight interesting behavior trends.
Another advantage of this approach is the opportunity to build backlinks in high impact outlets frequently read by your target audiences, thereby positively impacting your SEO.
Submit for Award Opportunities
Continue to elevate your brand’s reputation among consumers and key stakeholders by identifying product and brand-focused award opportunities throughout the year.
Search trade organizations and top target publications for opportunities that’ll resonate well with retailers, investors, consumers or potential employees such as the CES Innovation Awards, TWICE Picks Awards, TIME’s Best Inventions or Fast Company’s Most Innovative Companies.
This guest blog post was written by Ed Hecht, VP of Business Development at Max Borges Agency, a premier PR firm for Consumer Electronics Brands. Ed can be reached at 646-430-1800 or by email at email@example.com.
If you’re looking for PR strategies to get your brand through a slow period of the year, consider Max Borges Agency.
As a young product brand trying to make it big in the retail space, you get a lot of advice. Some advice may be good while others may be harmful for your product or for your company. In this short blog piece, I want to bust the common myths when selling to retailers.
After 10+ years as a retail consultant and talking to more product brands than I can count, these are 3 most common myths that I have heard along the way:
Myth # 1 – You have to be a large name brand to do business with a retailer
Myth # 2 – Retailers will beat me up on price so I will not make any money
Myth # 3 – Retailers don’t pay on time and will make me wait many months for payment
You don’t have to be a large name brand like Sony or Whirlpool to do business with a retailer. At Retailbound, we have helped several young brands to be successful with retailers of all shapes and sizes. Here are 4 reasons why:
Retail buyers are always on the lookout for that new breakout product. Look at brands like Fitbit, Nest or Ring as 3 great examples. They were not big brands when they first entered the retail space.
Retail buyers like working with smaller vendors. It takes less time to get things accomplished with smaller or young vendors as they have less layers of management and are usually more hungry than their larger competitors.
Retail buyers like product exclusives to separate themselves from the competition.
Many large retailers are encouraged by “the community” to use minority-owned and/or woman-owned suppliers.
Retail buyers are tough negotiators. If there was an official retail buyer’s training manual, the first word that buyers will learn to say is “No”. Retail buyers are put in place to help the retailer drive sales but more importantly, make money. Here are 3 reasons why most retail buyers will not beat you up on price (generally speaking) so you won’t make any money:
If the particular item is not a commodity and is not identical to a current supplier, then price would not be the main issue.
Retail buyers know that lowest cost supplier may not be the best service provider or has the best quality products. There were times when I was a young in-experienced retail buyer I wish I did not chose the lowest price supplier as the outcome was not as I expected.
Other than price, there are other ways to deal with the retail buyer. From expanding the store count size to tweaking the back-end program, there are several options in negotiation other than using the “price card”.
Finally, the myth that retailers do not pay on time and make you wait a very long time for payment is untrue. Granted, there are a small handful of retailers out there who are notoriously late. I am a big believer of Karma. Those retailers who abuse the payment process with their vendor community end up not getting the best deals or the best products. There are a couple of reasons why this myth is not true:
Many retailers do actually pay on time. Most retailers payment terms vary between net 30 to net 90, with net 60 being the average for large retailers. If you can’t wait for a retailer to pay you in 60 days, offer an early payment discount such as 2%30,n60 meaning that if the retailer pays your invoice in 30 days or less, they get an additional 2% discount off the invoice.
If vendors follow the retailer’s procedures for payment, they will get paid on time.
More and more vendors are using EDI to transmit payment to their vendors. No more waiting for “the check is in the mail”.
I hope this short blog post helps clear some of the common myths when selling to retailers. If you need help with scaling your business in retail, please reach out to me directly at firstname.lastname@example.org.
It’s a sad reality, but many startup and early stage companies fail. Whether it’s a lack of capital, poor product-market fit or leadership inexperience, roughly 75 percent of all startups fail.
Why do we accept failure as an inherent risk of founding a startup? Failure isn’t an option when you leave your life’s work on the chopping block. We don’t need any more early stage companies to taste defeat.
After 20 years in business development, corporate development and law in the technology industry, I’ve seen my fair share of failures. However, after advising and investing in many startups myself, I’ve come to realize the real reasons startups fail.
Pitfall #1: The 1,000 ping-pong ball strategy
Every startup wants growth, expansion, and scale. They have to determine how and where to sell more products and services at scale.
The problem? Most startups go too far. Instead of juggling a few ping-pong balls, they pick up hundreds more in an effort to be the best. I’ve seen that most startups will do whatever they can for their customer, supplier, or partner to make a sale happen.
This results in what I call market and sector “dabbling.” Because startups flex to make sales (any sales), they have a handful of customers spread across multiple sectors.
Suddenly you have more ping-pong balls firing at you from multiple directions. You have a small sample size of clients and little credibility in the market. You can’t specialize in or understand a specific sector because you’re all over the place.
Unfortunately, most startups don’t have time on their side. You have to pick the right sector and market as soon as possible if you want to scale.
Ask yourself one important question: “What real, meaningful, and identifiable business impact do we give the customer?”
I’m not talking about soft business drivers, but hard, measurable impact. Demonstrate how you save customers time, money, or frustration in a meaningful way. This will keep you focused as you grow in the right areas.
Pitfall #2: The “It depends” business model
Has a customer or investor ever asked you, “What’s your business model?”
If your answer was, “It depends,” you have a major problem. This steals focus away from your startup, leading into Pitfall #1 and a cycle of failure.
You can’t change your business model to suit a different customer every day.
Every company, no matter its size, needs a scalable and repeatable business model. This business model must align to the key business drivers for customers in your market. A solid business model is critical to growth in any market sector.
Determine what your business stands for. What kind of business are you building?
Whatever your model, stay true to it. Be willing to walk away from a deal if the opportunity doesn’t align with your model.
The sooner you recognize a bad customer-model fit, the sooner you can move on to the next opportunity.
Pitfall #3: “I can’t say no!”
This point links back to all the other Pitfalls, but it deserves a special mention.
Look back on your business dealings in the past year. Can you remember a situation where you walked away from a deal? Do you remember continually changing your business model or strategy to win an individual deal?
If this happened to you, you don’t know how to say “no.” When you morph to fit every opportunity that comes your way, it’s impossible to have a repeatable, scalable, or profitable business.
Pick a strategy and business model that works. Use this model as a yardstick for every new opportunity.
If the opportunity doesn’t match your model, simply say “no.” It’s that easy.
Pitfall #4: “All I know is they purchased it”
Do you know why customers buy from you?
No? Unfortunately, you aren’t alone. It’s astonishing how many startup and early stage companies don’t know why customers buy from them.
What’s more alarming is how few companies take time to understand their customers. The result is startups wasting resources on products that don’t address customer pain points, ultimately leading to failure.
Talk to your customers. Listen to your customers. Invest the time to reach out and understand why they buy from you. Verify that they’re actually using the product and not simply purchasing and abandoning it.
What problem does your product address? What more could it do for your customers?
Quantify the value of your product for customers, whether in time saved, tasks streamlined, or money saved. Use these as metrics to market and improve your product over time.
Pitfall #5. “I don’t know how to lead”
Let’s take a page from sports here.
A head football coach can’t defer blame to an assistant coach. No matter the circumstances or actions of their subordinates, failure falls to the leader.
In the case of a startup, failure always falls to the CEO, regardless of the actions of other executives or employees. It’s this failure to lead that causes so many companies to fail.
Leadership has nothing to do with capability, experience, or your IQ. Most CEOs are incredibly intelligent.
The problem is that most CEOs fail to define their role as CEO. A CEO needs to understand how he or she works in the business. This helps them hire capable folks to handle key business tasks outside the CEO’s skillset.
There are so many types of CEOs. They have varying backgrounds in finance, product, legal, marketing, sales, strategy, operations, and more.
The key is to understand your area of focus as the CEO. What is your experience? What are your daily duties as a CEO?
Once you’ve defined your responsibilities, outline what else needs to happen to run your business. Hire team members to do these tasks through smart delegation. Hold each leader accountable for growing a team under them.
This sounds simple enough, but delegation requires a lot of awareness, confidence and emotional intelligence.
Some CEOs naturally develop these skills in life, but many others need to work on self-awareness. Leverage counselors, mentors, and consultants to help you improve your leadership style.
The bottom line
These five pitfalls are responsible for the failure of many great startups. Don’t let your early stage technology company fall prey to these mistakes.
The Amazon Early Reviewer Program is a tool by Amazon.com for Amazon.com sellers that encourages customers who have already purchased a product to share their honest, authentic experience about the product. This article will outline why Amazon has launched the problem with inauthentic reviews, what the Amazon Early Reviewer Program is, who is selected for the Amazon Early Reviewer Program, type of sellers the program works best with, SKU enrollment eligibility, costs, value, and resources.
The Problem with Inauthentic Reviews
Trust is a major factor why customers shop on Amazon.com. Trust that when the customer shops they will find what they are looking for, trust that when an order is placed they will receive the product in a timely manner, and trust that when customers are buying a product they are receiving a true representation of the product.
Unfortunately, many sellers use unauthorized tactics to “game the Amazon search algorithm” in order to have their product listing show higher in the search result and convert to sales such as offering an incentive in exchange for a review. This is in clear violation of the Amazon community guidelines regarding promotional content.
In recent months, Amazon has been cracking down on fake reviews and for good reason: if customers are reading inauthentic, fraudulent reviews, they are not getting the true social proof that reviews provide. This is where the Amazon Early Reviewer Program was born.
What is the Amazon Early Reviewer Program
The Amazon Early Reviewer Program encourages customers who have already purchased a product to share their authentic experience about that product. Amazon provides the customers who have purchased your product a small Amazon gift card ($1 – $3) in exchange for the review. These reviews are deemed authentic and not in the form of a promotion because these customers have already purchased the product. The program works with product listings with less than 5 reviews. If enrolled, the program will stop once the product receives greater 5 reviews. Each product listing costs $60 to enroll.
Who is Selected to review for the Amazon Early Reviewer Program?
Amazon selects at random from all customers who have purchased products participating in the program as long as they have no history of abusive or dishonest behavior in the program. Amazon employees, participating sellers and their friends and family are not eligible to participate in this program.
Type of Seller This Program Works Best With
The Early Reviewer Program works best for brands and manufacturers that have sold several units but are not gaining traction with customers organically leaving reviews. Since the program works with customers that have already made purchases, it does not work with products that have zero sales.
SKU Enrollment Eligibility
There are several eligibility requirements to be a part of the program:
Product Listings must have fewer than 5 reviews at the time of enrollment
The offer price must be greater than $15
Enrollment is for Parent level listings or stand-alone products. Child SKUs are automatically enrolled with the parent
Each SKU enrollment is $60 (plus any applicable taxes). You are charged the $60 fee once you receive your first review. If your product does not get 5 reviews you will not receive a refund.
Is the Amazon Early Reviewer Program Worth It?
At a $60 price point for 5 reviews that translates to $12 for each review. Just by looking at the cost it may seem that this program is not worth it. However, if your product is enrolled in the program and happens to generate 5 5-star reviews, the value of the social proof showing that these customers had an amazing experience could convert future “on the fence” potential customer to actual customers. Getting reviews at the onset of a new product listing is both difficult and vitally important so brands and manufactures should consider the cost/benefits of the Amazon Early Reviewer Program.
This guest blog post is written by Will Tjernlund from Goat Consulting (www.goatconsulting.com), a premier Amazon Consulting Agency. Will can be reached at email@example.com if you are interested in this program and want to learn more.
Study after study has shown that PR is much more cost-effective than advertising. Coverage in one segment on a major network show or in a top-tier publication is equivalent in value to more than a year of a typical PR retainer and out of reach for most businesses. Just ask to see a rate card! That two-minute segment or that half page coverage as an ad placement would come at a staggering price tag.
Now here’s the one-two combo – editorial coverage is seen as more credible than advertising. It is a third-party opinion and not the company touting its products or services, so consumers tend to both pay attention to and trust the information delivered through editorial/news more than through advertising.
Before we go for the knockout, we will admit that the one advantage of paid advertising is total control. You can dictate where and when it is placed and what the messaging will be. That is a blocked punch for advertising, but the downside is you pay for the timing, and when it runs, it is done. A lot of PR editorial remains archived online and can contribute to your marketing efforts years down the line. For example, a product review can remain online in perpetuity. Anytime someone is researching your company or product; this review may pop up. A review from a trusted source, even if a few months or even a few years old can convince them to buy. In fact, just seeing the Google search results with multiple reviews and articles may give the consumer the confidence they need to choose your product over another.
We get it. The end goal is to sell a product, so you want to know which one has the best uppercut. That winner is more difficult to call. Since PR coverage typically does not include a call to action, it is often difficult to track sales back to a specific PR placement. While we often get great feedback from clients on how PR moved their sales needle, we encourage you to judge a PR campaign on two elements: media awareness and the number of placements received. The media cannot cover you if they are not knowledgeable about your brand. Even if that placement does not take place immediately, having your brand on their radar is important. Similarly, a consumer needs to first know you exist even to consider buying or engaging what you are selling. The placement or purchase may not happen immediately, but raising awareness is fundamental to your marketing efforts.
Sales from advertising are easier to track because there typically is a call to action (sometimes a direct link or other traceable code) and the visibility of the ad is in a specific window of time. For this reason, you can make a stronger tie between an ad placement and a particular sale. The PR connection is much harder to identify and measure. However, the superior value and long-term ROI of PR vs. advertising has been proven time and time again. We at Orca have seen it work so well for so many for so long – so we have no problem weighing in on the issue. We believe PR is pound for pound the better investment for your marketing dollars.
Okay, put down the gloves. Let’s not fight. To build awareness and drive sales, you should ideally budget for a multi-pronged approach. While PR is a critical component of a strong sales and marketing effort – advertising, digital marketing, distribution, price and demand all factor into the equation as well. To become the undisputed champion, you will need to find the right mix that best fits your unique situation and sales process, driven by the nature of your product and target consumer.
This guest blog post was written by Lisa Leigh Kelly from Orca Communications, a premium PR agency for up and coming brands. Lisa can be reached by email at Lisa@OrcaPR.com or by phone at 512-573-0078.
In today’s omni-channel market, retail is simply another medium of interacting and selling to your target customer base. Similarly to retail, Amazon and direct-to-consumer channels are an opportunity. It can be done correctly, incorrectly, or somewhere in between.
Most new product brands I speak with begin their growth journey selling online due to the thick barrier-of-entry to physical retail. However, for many digitally native brands there comes a time in the growth journey when customer acquisition costs (CAC) online outweigh the return. And competition for consumers’ attention online will only increase over time.
I’ve heard a few Amazon entrepreneurs tell me that the “goal on Amazon is to be able to leave Amazon” referring to the desire to expand into new places target customers are shopping.
Hence, we see “retail-as-a-service” companies like B8ta, Leap, or Storefront seeking to bridge financial, knowledge, and other barriers involved in placing products into brick-and-mortar channels.
Let’s be honest. It’s easy to point out that retailers need to evolve with a changing consumer landscape. As a brand however, it’s about understanding which opportunities make sense, staying ahead of the competitive landscape, and managing all moving pieces effectively.
It’s Not Big Box or Nothing
Many who fail (or are nervous) to scale up a CPG brand at retail will blame the heavy cost and margins of selling to national brick-and-mortar retailers – Target, Walmart, Best Buy, etc. Which is totally valid. This hides the real dilemma which is that most digitally native brands pursuing big box channel placement are not ready – financially, knowledgeably, or resource-wise.
Instead of going after the largest retailers right away, a “slow burn” approach to retail is often the best:
Online / direct-to-consumer first
Low-hanging .com retailers, catalogs, TV retailers, select distributors, specialty
Larger brick-and-mortar store tests and expansion
Every brands’ strategy is different however, and this “slow burn” strategy never looks the same.
Answering the Two Big Questions
When retail partners refer young brands to our team at Retailbound, one of the most common sentiments is “they simply have no clue about retail”. In these cases, distributors or manufacturer’s reps discover that it’s costing them way too much time to manage a brand than they’re worth.
The best sales agents, best distributors, best retailers don’t want to work with a brand that’s not ready. And wouldn’t it surprise you that roughly 80% of brands I speak with believe they’re ready? Not the case – despite being brilliant engineers, designers, and business savvy.
In early 2018, we brought on a brand who did $1-2M in eCommerce revenue in Europe. Fantastic. They were already talking with retailers in the US and trying to solidify deals. Perfect. We started by reviewing their retail strategies in the 1st week. And guess what?
They were structured to lose money per sale at most retail accounts in the US based on their current pricing strategy. Geez…
There are two overarching questions your potential retail distribution partners are thinking:
How much time and energy will I need to allocate to manage your brand?
Retail is a people industry – for better or worse. Selling your product to a retailer, distribution partner, or signing up sales reps does not justify being hands-off. Are you seen as a partner or customer?
In the last few months alone, several real-world examples of this have included:
Brand A – develops a thorough retail distribution strategy, establishes key retail channels with strong sales growth using the Retailbound model, and is about to launch a 200 store test with a large brick-and-mortar health retailer. Having set up a channel presence, they decide to manage ongoing channel initiatives themselves rather than use our proven team. Samples and communication to the sales team falls through the cracks, large retail chain test backs out of deal.
Brand B – after establishing online sales traction decides to sign on a large distributor to expand into retail channels. Despite spending many months finding the right distribution deal, after 3 months distributor terminates contract with the brand due to a lack of participation with distributor marketing programs.
You wouldn’t leave your baby with a babysitter without instructions, right? Don’t just leave your product with a distributor and hope it works out.
Are these brands still around today? Yes. Mistakes at retail don’t always lead to bankruptcy; however, it does not take many mistakes to ripple through the retail community – especially when buyers all seem to know each other.
How will you help drive traffic and sales better than your competitors and help me outperform my competitors?
Retailers and distributors will have a variety of “marketing vehicles” for you to choose from – email newsletters, print ads, POP placements, “deals of the week” online, etc. or a general marketing fund to buy into (although buyer beware). That being said, you can’t just throw money at marketing and hope something sticks.
For this reason, the cost-effective “slow burn” channel approach we mentioned above comes in handy to dial in what works and what doesn’t in engaging your target audience. This is where pop-ups and retailers like B8ta can come in handy if you’re struggling to gather marketing data.
Offline marketing testing combined with a thorough digital marketing approach is what’s often needed especially for 1-5 product brands who have a lot to prove. As mentioned before, retailers are working tirelessly to keep up with the changing landscape. If you can prove to them that you’re ahead of the curve in bringing in traffic / customer attention… you’re sitting in a good place.
A couple examples of working with channel partners:
Daily deals and spotlights: NewEgg.com
Airport stores: In-store packaging and product positioning
What does all of this mean to you?
Retail requires a holistic approach. Having a proven, omni-channel retail expert who’s done strategy, sales, marketing, channel management at every step of the process is needed. Not just sales. Not just branding.
Understand what’s required at a high-level (I.e. margin requirements, necessity of working alongside distributors, etc) and then find someone who understands the dirty details of execution.
Moving from online to offline is like graduating from high school to university and expecting to still be the smartest kid in the class.
Interested in scaling through your retail challenges? Contact Benjamin, our Director of Business Development by email at firstname.lastname@example.org
A successful POP display will not only drive product sales, but it will create brand awareness which will increase both brick and mortar sales as well as online sales. But what about when point of purchase displays fail? Examining the most common points of failure of unsuccessful retail display programs can help brands and retailers avoid these typical pitfalls and increase their chance of success.
Let’s look at 10 of the most common reasons why POP display programs fail.
1. Visually Unremarkable
Effective visual merchandising is all about creating appeal sufficient to capture a shopper’s attention in a crowded, noisy retail landscape. If a display does not stand out, if it is not attractive, and if it is simply visually underwhelming, chances are it won’t captivate a consumer and will fail to do its job as a silent salesman for the product or brand. This tends to happen most often when a company does not spend the time necessary to engage in a thoughtful design process or if it thinks it can save money by having its supplier’s sister factory in China come up with a display. Here’s an example of a display that might be functional but does not really pass the test of being visually appealing.
Displays that are too expensive relative to the value of the product or relative to the expected sales the display can generate are doomed to failure. A significant percentage of our customers have no idea about what the budget should be for their display program. They have not done the math to figure out how much product they would need to sell to pay for the display or get a positive return on investment. Without this upfront analysis, it is easy to waste design time or end up with a display that makes no economic sense. We recently got an inquiry for a postcard display that was designed to hold a minimum of 20 postcards. The design firm that did the work provided a bill of materials that was over $600 per display. It was pretty easy to determine that the design was a non-starter.
3. Lame Messaging/Branding
Lame messaging/branding typically takes two forms. First, it can be non-existent or simply not impactful. We see this in cases in which customers skimp on the graphics of a display to save money or when the graphics don’t do the job of explaining what the product does.
The second case is when a brand tries to communicate too much. Some companies are so in love with their product that they feel compelled to list all 12 features and benefits, often forgetting the customer will likely only spend a few seconds reading the text on their display.
4. Inadequate Packaging
One of the surest ways to guarantee failure of a POP display is to have it show up damaged. This is a no-brainer, but a surprising number of customers consider packaging an afterthought and most have no idea or what proper packaging really costs. In our experience, freight companies tend to be fairly careless, and even if something is packed well, it can show up damaged. This can also be true for displays that are shipped on pallets, particularly if the shipment is cross-docked. In most cases, the failure of inadequate packaging can be avoided if packaging is considered part of the design process and if a company is willing to invest in the packaging in the same way that it invests in a display.
5. Poor Serviceability
POP displays that are difficult to service can be one of the causes of a failed display program. Poor serviceability can take several forms. First, the display can simply be difficult to clean. A sunglass display with a black base can show dust really quickly, for example. Or, a display that has lots of nooks and crannies can be a magnet for dirt and might start to look bad in no time.
Second, a lot of shoppers are very conscientious about putting merchandise back neatly. So, a display that has caps sitting on a shelf, for example, is likely to be in disarray by the end of a busy shopping day, whereas a display that features organizing cap pockets provides a call to the consumer to put the caps back in an organized fashion.
Third, some customers think it is a great idea to include a brochure holder on a display to provide the shopper with more information about how great their product is. While this might not be a bad idea, more often than not the brochure holders sit empty on the display because the level of service required to keep them stocked with brochures is not feasible.
Fourth, some displays are too difficult to reload. We witnessed this with an endcap display for a major consumer beverage company. The company that designed the endcap put the top shelf too high so the sales guys reloading the display had to step on the bottom shelf when reloading which led to a lot of damage.
6. Not Durable
Poorly engineered or poorly manufactured displays often do not stand the test of time. Given the abuse that most displays need to take in a typical retail environment, it is better to overengineer a display so it will last. A display with failing casters, broken welds, scratched graphics or chipping MDF will ultimately reflect poorly on a brand and will likely need to be replaced sooner than expected.
7. Late to Market
When a POP display misses an in-store target date, it can not only jeopardize a company’s relationship with the retailer, but it can cut a selling season short. More importantly, it can wreak havoc on a display program’s economics. When a display arrives in store later than expected, it results in lost sales, most of which will never be recaptured. Calculating the opportunity cost of lost sales from a 1- or 2-month delay in getting a POP display in-store can often lead to depression since in many cases the profit on sales from those missed months can sometimes be enough to pay for the display.
8. Difficult to Assemble
The majority of the displays we manufacture for customers are shipped knock-down and assembled by the retailer. In most cases, retailers are willing to assemble displays as long as there are clear directions and the assembly time does not exceed 15-20 minutes. However, if a display is too complicated or difficult to assemble, the retailer may not assemble it correctly, may only partially assemble the display, or may just give up and not put it out on the floor.
Safety is a major concern for retailers. With unsupervised traffic in their stores, retailers are understandably cautious when it comes to display safety. There was a recent story in the news about a 2-year old who was killed by a mirror that fell over at a Payless store. It is worth taking precautions to ensure your POP display will not fall over or present a safety risk to shoppers since safety concerns are one of the fastest ways to kill a POP display program.
10. Subject to Hijacking
Unless your display is permanently branded, it runs the risk of being hijacked by the retailer or another brand and used for something else. It is not enough to have interchangeable, branded header signs. The header signs may act as a hijacking deterrent for a period of time, but we have seen too many situations where a company makes the investment in a display and after 6 months the display gets repurposed for another product. Hijacking of a display shortens the economic life of a display and can reduce the return on investment of the display or result in a loss. Whenever possible, we recommend that our customers add screen printed branding, laser engraving, or some form of permanent branding to discourage display hijacking.
This guest post was written by Jim Hollen from RICH Ltd. (www.richltd.com), a top POP Display and Merchandising Solutions company with over 30 years in business. If you are looking to avoid these common reasons why most POP display programs fail in retail, reach out to Jim at email@example.com or by phone at 760-722-2300 ext. 229.
Since our recent post “Top 10 Mistakes Potential Retail Vendors Make” was a big hit on Linkedin, we thought why not create a post on the top 10 tips for product start-ups to make the 2019 Consumer Electronics Show (CES) successful.
Ever since the early 1990s, I have attended CES and have seen the show floor, attendees, and exhibitors evolve over the years. Exhibiting at CES can be (and should be) one of the most productive and cost-effective means for product start-ups to promote its products and services. However, if you go to the show unprepared, you really will be wasting both time and money.
10) Prepare your CES Pitch
It’s important that everybody who is working your booth are “singing from the same hymn book”. Too many times I have heard inconsistent pitches at the various booths. Create your CES pitch well in advance and make sure your teammates are using it in front of attendees. Also, your pitch or conversation with an attendee should include a call to action such as “I will email you a PDF sales sheet when I get back in the office”.
9) Send Enough Staff to the Show
You are spending a lot of money to exhibit at CES. Don’t skimp by just sending yourself. Having enough people on your team to cover the booth is important for many reasons. You hate to leave the booth unmanned in order to grab a bite to eat and find out that an important retailer showed up and you were not there. For your associates that will be joining you in the booth, stress the value of friendly greetings, polite manners, and appropriate body language.
8) Set Appointments
For years, I have arranged CES appointments for our clients. Start reaching out to potential retailers as well as the media to nail down important meetings on your CES calendar. That way you will be able to make the most of CES and guarantee success before you even arrive to Las Vegas. As a reminder, you want to confirm your appointments prior to the show. Inevitably, there will be meetings that will be missed. You can always reschedule for phone calls or face-to-face meetings after the show.
7) Check out the Competition
CES offers you an ideal opportunity to see not only who your competitors are most aggressively targeting, but the methods they are using to entice these prospects. Find time in your schedule to walk the show and set a goal of coming away with notes on each of your competitors to see not only what they are selling, but how they are doing it.
6) Make your Booth a Fun Place to Visit
CES attendees spend much of their time meeting with exhibitors and attending workshops. By the end of the day, they are likely to be tired overwhelmed by the amount of information they have been given, and easily bored by standard presentations and sales talk. That is why making your booth a fun place to visit can help you stand out from your competition. A laid-back atmosphere will almost surely be a welcome change from the typical CES trade show display. Check out the next two tips to make your booth the place to visit.
5) Offer a Product Demonstration
Product demonstrations are a great way to draw a crowd inside your booth. Make sure your team knows how to give an effective and engaging presentation. Don’t forget to collect those business cards!
4) Have the Perfect Booth Giveaway
Besides product demonstrations, offer a product giveaway is another great way to get people to stop in front of your booth. We have had our clients, when it’s feasible, offer booth visitors a chance to win one of their new products in exchange for a business card. If you cannot offer one of your products as a giveaway, offer mints or something small in your booth.
3) Don’t forget those product sales sheets
Many times, attendees will grab a product sales sheet if (a) they don’t have the time right now to stop in your booth or (b) your booth is crowded. Having product literature with your contact info that attendees can pick up at your booth is a must have. If you have the budget, put all your product sell sheets on a jump-drive to hand out to attendees in order to save room in their bag.
2) Create a Media Kit
Often, members of the press will stop by your booth. Have a jump-drive with your media kit, which should include company information, industry awards, product information, etc.…that you can hand out to select members of the press.
1) Have a Follow-Up Protocol in Place
One of the most frustrating things that happens a lot is when exhibitors forgot to follow up on hot leads, promising prospects, or likely customers. When I was a large retail buyer, I would hand my business card to exhibitors that I wanted more information from. Many did not follow up. What a waste of money for those exhibitors who spent thousands of dollars to be at CES!
Cheers to kicking off the new year at CES 2019! Retailbound can’t wait to get a sneak peek of the latest in tech innovation. If you’re interested in meeting with our retail channel management experts at the show, we would love to meet up with you. Book a meeting with our team today.