8 Mistakes Retail Solution Providers Can’t Make

I help agencies, brand marketers, solution providers, tech companies and others who rely on retail future-proof retail positioning and accelerate business development. Through my Retail Reframe series, I shine a spotlight on the challenges and triumphs my clients experience as they navigate retail “from now to next.”

One of the fastest-growing client segments in my retail advisory practice is solution providers – those who support retailers with agency services, data analytics, digital innovation, merchandising services and other tools. Business is booming for many of these companies, because retailers have opened themselves up to outside solutions like never before. They no longer believe they can or even should develop every capability in-house as they manage accelerating change, and both big enterprise solution providers and niche players are benefitting from this mind shift. 

The decision whether to buy, build or bridge looms large for retailers as they build out their physical and digital platforms, and no two retailers – or even a single retailer consistently – are taking the same approach. Walmart, for example, has been on an acquisitive streak for a few years but is augmenting its strategy with strategic partnerships and refining how it will vet and manage them. Lowe’s has joined other retailers that launched an in-house innovation lab, but partnerships with various tech providers drive many of the solutions coming out of it. These days, most retailers are working with innumerable third-party providers to supplement their strategies (whether they publicly disclose those relationships or not).

The opportunity is ripe for solution providers as retailers become less insular. However, retailers tell me that some of them are at risk of blowing it by reinforcing the habits below:

1.    Attempting to run before learning to crawl – It’s only natural that multi-division solution providers would want to sell multiple services to a retailer, and I know from my work with these companies that salespeople are under a ton of pressure to do so. After all, there are fewer big retail customers to go around these days, so it makes sense to max out every opportunity. Retailers tell me that, when salespeople begin lobbying new decision-makers when the ink is barely dry on the beta, relationships can hit the skids, especially if the core solution is still full of snafus. Build a solid case study, and dance with the one that brung ya’ before branching out.

2.    Committing a scale fail – On the other hand, the opposite action generally affects smaller-solution providers. It’s hard to turn business down, especially when demand exceeds your wildest dreams and those by-user licensing models that you use for smaller projects are going through the roof. Wow, you could make your five-year projections happen with one customer! Not so fast, fee-breath. Retailers want to see that you’ve thought things through and that you will pivot your model to meet their scale. On the other side of the spectrum, I see far too many niche solution providers give away business by parlaying the nominal one-time fee and “unlimited” plans that made sense in their early days to large customers, many of which could and would pay far more for what they bring to the table. Plan for scale and own your value.

3.    Abusing access privileges – “Who are these people?” These are four words that you don’t want a retailer to utter about your teams. Gaining badge access or onsite presence of any kind should never be taken for granted, if only because retailers take it so seriously. If your teams are roaming the halls at retailer HQ, popping heads in doors and tapping on shoulders, you’re setting yourself up for a push back. Trust me, even major players have been humbled by the Big Revoke, and once it happens, worming your way back in will take Herculean effort.

4.    Going long – Fewer things are more gratifying to a solution provider than achieving long-term client dependencies, and when retailers keep picking up what you’re throwing down, it’s tempting to stretch out engagements. However, if in the past, vendor value was defined by long-term contracts, retailers tell me that they will increasingly favor shorter-term, high-impact projects going forward. That doesn’t mean they won’t keep re-upping with you, but crafting bite-sized solutions that achieve specific outcomes will put you in good stead from the start, even if you’re a big dog.   

5.    Over-selling professional services – I regularly hear from companies whose main goal is to “layer on” consulting services, either as a new practice within their companies or as a next-stage growth strategy with existing customers. I’ve helped plenty of companies make this happen, but it can’t be taken lightly. In my experience, retailers are more receptive to professional services when it isn't an after-thought. Better to bake it in from the start and clearly articulate, and quantify, the ways that your teams’ expertise drives additional value for your solutions.

6.    Forgetting your place – I’ve had to remind a few companies that their customer is the retailer and everyone who works there, not just top execs or decision-makers. Some solution providers develop delusions of grandeur that manifest as condescension to lower-ranking retail employees and even miscalculations as to who “matters” in the first place. One retail executive shared a story with me about a software vendor who assumed the executive was an assistant based on her hipster appearance. He talked down to her once, but never had the opportunity to do it again.

7.    Providing sketchy value – Retailers used to be satisfied to keep up with competitors and make incremental improvements. These days, not so much. Retailers expect your solutions to provide a clearly defined competitive leap in the arenas that matter most to them. That requires extensive pre-presentation research on specific retailers (not just the general industry or consumers), with a focus on their current and future corporate initiatives. In my experience, solutions-in-search-of-a-problem and solutions created under false assumptions are still far too common, even when information regarding retailers' specific goals is widely available and clearly articulated.

8.    Ignoring the future – With so much happening in retail Right Now(!) it’s easy to get lost in the present. Of course, retailers can’t afford to do that, and the ones that have made it this far are looking to the future. They expect the same from you and in fact are relying on industry experts to help them see ahead of the curve. There’s no shame in presenting a solution that addresses an immediate need, but retailers want to see where things will go from there. What is your product roadmap, and are emerging innovations (artificial intelligence/machine learning, for example) on your horizon?

Solution providers are a fast-growing but less-talked-about contingent within retail, and the competitive field will get more crowded as retailers seek advantages outside their borders. Don’t let easy-to-avoid mistakes bungle your opportunities to go big and branch out.


This article was picked up by Retail Wire. Check out the awesome discussion.


Learn more about bringing a Platform Positioning workshop or Retail Trajectories presentation to your teams, by reaching out directly at carol@spieckermanretail.com

Carol Spieckerman