Edited offerings, limited distribution, getting behind one or two brands . . . I remember when narrowing down options was a way to a retailer’s heart . . . and when the phrase “You know what’s best” actually came from the RETAILER side of the table fairly often. Of course, that was back when vendors were a vital resource to retailers! http://is.gd/12HzK
Over the last decade, retail vendors have expanded their product and brand portfolios, points of distribution, door counts, price point options, and sourcing selection . . . Retailers drove much of this because, as they got savvier, they began expecting even more from vendors . . . And, as retailers ruthlessly wrung out efficiencies and vendors rose to the challenge, the baseline kept getting higher for everyone. The explosion of private label, licensing and brand brokering activity brings even more options and expectations for vendor flexibility.
Yes we CAN fill that order, source that product, hit that price, execute under that brand . . . You want it, you got it! Vendors have become so conditioned to "can-do" that giving direction feels alien and downright risky. While this defensive, order-taking mindset has served vendors well over the past decade (and certainly through the recession), here’s four reasons why we’re advising our clients to close down the smorgasbord and return to more prescriptive tactics.
1. Option Overload – Just when the moving parts of retail seemed to be getting manageable . . . and measureable, along came digital media and social networking; both of which are multi-faceted worlds of their own. No retailer claims to have this all figured out, yet all of them are jumping in regardless. You can't afford to play wait-and-see or to be all over the place. Now is the time to collaborate with retailers on emerging media and to decide where you will and won't play.
2. High Turnover – Buyers and other decision-makers have been transitioning out of positions at faster and faster rates as retailers build bench strength and groom future leaders. The swinging door has only sped up as retailers eliminate and consolidate positions at HQ. That means that vendors and service providers that have expertise, category knowledge and insight have a real advantage . . . but only if they step up and use it!
3. The Search for Certainty – What is more destabilizing than uncertainty? MORE uncertainty! Retailers have never favored confused, overwhelmed or tentative vendors and in a difficult retail environment, all of those traits are magnified. It’s time to have a point of view and to instill confidence in your organization and in your retail partners. No one is going to march boldly ahead with a mouseburger!
4. The Right Brain of Retail – Retailers are shutting down silos and they aren’t relying on quantifiable metrics exclusively; that goes for how they choose vendors and brands as well.Retailers want to see coordinated effort, collaboration and a value around non-quantifiable touch points on the vendor side.
We call this shift the “right brain of retail” and vendors will need to evolve into this mindset WITH their retail partners, not behind, if they want to have a seat at the table. This is particularly true as those trashcan fires start to die down and consumer confidence moves north. Consumers are getting ready to spend and retailers will be looking for bold ideas in short order.
It’s time to grow a voice, edit the menu, crank up the innovation, and get out your prescription pad . . . Options aren’t answers anymore . . . and "rationalization" isn't always rational.