The retail landscape has become increasingly competitive as e-commerce grows, and brands are looking for ways to stay ahead. One proven strategy is for consumer brand suppliers to partner with retailers to boost sell-through and velocity. This blog post will explore the importance of such partnerships and how they can lead to mutually beneficial outcomes for both parties involved.
Building Strong Relationships
A strong relationship between consumer brand suppliers and retailers is vital for mutual success. Working together, they can identify growth opportunities, streamline processes, and enhance performance. In addition, this collaboration can lead to increased sales, improved product placement, and better inventory management.
Win-Win Strategies
When consumer brand suppliers and retailers collaborate, they can develop strategies that benefit both parties. These can include:
Promotional Planning: By working together, suppliers and retailers can identify the most effective promotional activities to drive sales. This may include in-store promotions, online marketing campaigns, or joint events. Combining their efforts and resources can create powerful promotional strategies that drive customer interest and sales.
Inventory Management: Efficient inventory management is crucial for maintaining optimal stock levels and minimizing waste. Collaboration lets suppliers and retailers share data and insights on customer preferences, seasonal trends, and inventory levels. This enables better forecasting and decision-making, ensuring the right products are in stock at the right time.
Product Innovation: Retailers can provide valuable insights into customer preferences and market trends, which can help suppliers develop new products that cater to the evolving demands of consumers. Suppliers and retailers can better meet customer expectations and drive sales by aligning product offerings.
Data Sharing: Data-driven decision-making is essential for business success. By sharing sales data, customer feedback, and other relevant information, suppliers, and retailers can make informed decisions that will drive sales and improve customer satisfaction.
Benefits of Increased Sell-Through and Velocity
Partnering with retailers offers a range of benefits for consumer brand suppliers. These include:
Improved Sales Performance: Collaborative efforts can lead to increased sell-through rates, as well-orchestrated promotions, effective product placement, and better inventory management help ensure products are visible and available to customers.
Enhanced Brand Visibility: Working together with retailers can help suppliers increase brand awareness and visibility in the marketplace. This can result in increased customer loyalty and repeat purchases.
Increased Market Share: Suppliers can effectively increase their market share by collaborating with retailers and implementing strategies that cater to the market’s needs.
Reduced Costs: Streamlined processes, efficient inventory management, and optimized marketing efforts can save suppliers, and retailers cost.
Conclusion
In an increasingly competitive retail landscape, the collaboration between consumer brand suppliers and retailers is essential for boosting sell-through and velocity. By building strong partnerships and working together to develop win-win strategies, both parties can enjoy increased sales, improved customer satisfaction, and overall business growth.
Contact us to find out how we can grow revenue for your brand through increased sell-through and sales velocity.
There’s mounting evidence that wholesale remains more profitable regardless of the mass shift towards the direct-to-consumer model due to Covid.
It’s been found that wholesale provides greater control, access to data, a higher revenue per item sold, and total gross margin when compared to similar businesses that utilize a DTC model. This can be further demonstrated when comparing these businesses’ EBIT (earnings before interest and taxes).
Contributing Factors:
Increasing competition – as more businesses migrate to the virtual space, more noise is created as more businesses bid for a share of voice.
Privacy – The inception of GDPR and CCPA regulations has limited the capacity for businesses to communicate unsolicited messages to potential customers.
Ad blockers – due to the noise created by the increasing competition and bombardment of ads at various audiences, installing ad blockers have become more commonplace, making it harder for DTC brands to be seen.
Returns and free shipping: e-Commerce spent its early years highlighting widespread “30-day return policies” and “free shipping,” which is taking a toll on DTC margins.
The rising cost of ads – with more DTC competitors in-mark than ever before, the cost-per-click is skyrocketing. This can eat into the merchant’s profit margin or even exclude them entirely if their user acquisition cost is too high.
Although DTC profitability benefits from reduced rent and labor costs, other expenses add up over time. For example, fulfillment, logistics, heavier marketing, technology, and high returns.
Ultimately, both DTC and wholesale have pros and cons, so it’s up to the brand to decide which model is best for their business.
Why are brands attracted to DTC in the first place?
The COVID-19 pandemic and subsequent lockdowns have created an environment of comfort and necessity around online shopping. People worldwide have adapted to “stay at home” orders that require many purchases to be made online. Even as the world starts to reopen, some of that online shopping behavior will remain.
Additionally, DTC provides companies greater control over their brand, customer relationships, sales channels, and fulfillment.
When does DTC make sense:
While wholesale has a clear edge over DTC when comparing EBIT most of the time, there are some situations where DTC makes sense. However, this often depends on the product.
To determine whether DTC suits a brand, two questions need to be answered:
Can we accurately target the right customers?
Are these customers happy to shop online and from a single-brand source, or would they prefer to shop in-store where there’s a variety of brands available?
If both of these questions are yes, it may be worth exploring a DTC model.
However, keep in mind that, based on data, only brands who also sell their products via bricks-and-mortar stores do well in DTC.
Support for Wholesale brands:
Talk to us today if you’re looking for a powerful way to utilize hyper-local ads to drive traffic in-store and pick your products off the shelves.
As we covered in “Shopper Marketing Part 1:”, Shopper Marketing is the process of ensuring consumers are correctly engaged at every stage throughout the path to purchase, from awareness to consideration to conversion.
This article will explore what you can do to set up a shopper marketing strategy and what you can expect to achieve.
How to create a Shopper Marketing strategy:
Brands that implement a shopper marketing strategy correctly possess a competitive edge because compiling a plan requires a deeper understanding of the consumer path-to-purchase from a holistic perspective rather than individual components.
As a starting point for formulating your shopper marketing strategy, ask yourself these four essential questions:
What does your brand represent, and does that resonate with your target audience?
What is necessary for your target audience?
What are your goals beyond making sales?
What is your budget?
The answers to these questions should represent the heart and soul of your strategy, which can then wrap around each stage of your buyer’s journey:
Awareness Stage – Focus on brand recognition and storytelling to ensure you resonate with your target audience.
Consideration Stage – Deliver value and properly incentivize consumers to encourage them to purchase your products ahead of competitors’.
Conversion Stage – Delight with a positive customer experience and focus on building long-term relationships with your customers.
Retention Stage – Provide an easy way to connect and keep your customers coming back.
Now that you’ve formulated your objectives for each stage of the buyer’s journey, it’s time to think about how you should execute it. For example, what marketing activities will you implement to ensure brand recognition? How do you want to incentivize customers? What channels will you use to communicate this to your target audience?
You can use the traditional marketing principle of the “4 P’s” to map out your plan for executing the shopper marketing strategy:
Price: discounts, bundled offers, price communication, and coupon
Place: eCommerce stores, bricks and mortar stores, visual merchandising, store layout
Product: Featured products, packaging, catalogs
Promotion: promotion communications, advertising channels, communicating brand and products to consumers
What can be achieved with a Shopper Marketing Strategy?
By using a shopper marketing strategy as the lens for looking at the entire buyer journey as one, businesses can expect to:
Increase brand affinity by delivering more consistent marketing messages
Drive sales by looking at the entire path to purchase instead of individual stages
Improves long-term relationships with customers
Focuses on long-term gains rather than short-term objectives, which creates more consistency
Creates opportunity for data-driven decision-making by looking at the entire lifecycle and proper data attribution
A deeper understanding of customer segments and preferences by looking at their behaviors across a broader range of activities rather than in isolation
Provide more personalized customer experiences by tracking progress through the path to purchase.
Want to implement a shopper marketing strategy for your business? Please speak to us about how Brand to Basket delivers value at every customer journey stage.
‘Shopper marketing’ can be thought of as the intersection between consumer psychology, customer experience, and experiential marketing. These three elements combine to convert shoppers into buyers and build the brand’s equity within the retail environment while fostering long-term relationships with consumers.
Their customer’s path-to-purchase will establish each retailer’s shopper marketing strategy. For example, whether the purchase is being made for themself or someone else, the purchase research process, and which channels the customer prefers to make the purchase, such as in-store or online.
Shopper marketing builds its strategy on top of the unique path-to-purchase to create synergies and consistency in the messages presented to consumers throughout their journey to purchase.
A good case study for this is how many retailers have adopted emailing receipts instead of printing them. By doing so, it opts the customer into their email funnel.
Think about this – if a customer goes into the electronics department of a store and purchases a student edition of Microsoft Office and then provides their email address for the receipt to be sent to them, the store can now attribute that email address to someone who is likely a student. Then when it comes time for the “back to school” campaigns to roll out, that person will likely receive an email with various deals and promotions for other tools or products they might need and can drive them in-store (since it knows where they’ve made previous purchases from) or online with coupon codes.
What’s new about Shopper Marketing?
Shopper marketing tactics have been popular since the 80s, but forty years ago, they only took place in brick-and-mortar stores. With eCommerce and social media, shopper marketing has evolved to include these new sales channels.
The growth of the online space has paved the way for communicating and incentivizing customers, which plays a role in shopper marketing. For example, the ability to run loyalty programs or coupon promotions at the click of a button while seamlessly measuring conversions.
On being highly measurable, data analytics and business intelligence have come a long way. Having access to these insights has given retailers greater clarity around their customer’s purchase trends and habits, which can make informed business decisions to provide the best possible shopping experience.
What does the future hold for Shopper Marketing?
One pitfall of shopper marketing that many retailers fall for is the lack of personalization in their marketing communications. This is often because they’re often purchasing data from third-party vendors and applying it to their business, which is like trying to jam a square peg into a triangular hole – it just won’t fit. The future of shopper marketing is utilizing technology to customize the shopping experience better to suit personal preferences. In a hyper-competitive retail world, the winners will be the early adopters of technologies designed to influence purchase decisions.
If you want to stay ahead of the technological curve, speak to us today about how Brand to Basket drives revenue growth through personalized customer experiences.
The art of increasing the number of people who visit your store, whether physically or online, into paying customers is called “conversion rate optimization.”
Your conversion rate is calculated as the percentage of purchases compared to the total number of people who came into your store on a specific day.
There’s a few different tips and tricks for how to improve the conversion rate for your store:
Upselling and add-ons: Selling products in a package or complete solution rather than a single SKU. The profit margin generally comes from the second product sold because marketing expenses and fixed costs eat away the margin from the first product. Also, at the point of checkout, either the counter or at the website checkout, provide a range of commonly purchased items as impulse purchases. Another principle of retail merchandising is to place one main product with two companion products next to it, making it easier to upsell.
Staff Scheduling: The best way to schedule staff shifts is around the peaks in shopping behavior throughout the day. This helps ensure that customers receive the proper attention during these busier periods. Additionally, staff deployment to serve customers instead of tending to routines like stocking shelves or pricing is equally important. Finally, staff must be available to shoppers to encourage sales and improve conversion rates.
Staff Development & Training: Helpful sales associates who listen to customers and make recommendations can significantly boost conversions. Effectively training employees to help a shopper explore product options, ask about concerns and make helpful recommendations pays dividends. It’s always a great idea to create a collaborative environment by holding regular staff meetings to get everyone involved and on the same page. Incorporating weekly or monthly sales targets with incentives is a great way to boost morale and get staff excited. Employees are the most effective at upselling because they are on the ground, talking to customers, building trust, and making recommendations to the customer based on their needs.
Keep it moving: Reducing lengthy queues is vital because sometimes customers will avoid stores with long lines because they perceive the wait time will be too long. Unfortunately, long wait times often harm the customer experience. You can overcome this hurdle by placing registers at the back of the store or having multiple checkout counters so that there are numerous shorter lines instead of one long line. An alternative to this is ditching POS all together by going mobile.
Plan the layout: There’s proven consumer psychology at play when a customer steps into a store. These insights can be bolstered by clever retail merchandising to improve conversion rates. For example, your store’s first 5-15 feet is the “decompression zone,” whereby the customer soaks in the store environment and decides whether to continue their journey. Additionally, studies have shown that people tend to turn to whichever side they tend to drive on when they walk into a store. For example, people in the US, you’re more than 90% likely to turn right when you enter a store, whereas people in Australia, the UK, or New Zealand turn left. This means the direction that customers turn towards is your “power wall,” where you should display high-margin goods and ensure it’s well-stocked, clean, comprehensive, and easily navigated. You should also aim to remove excess merchandise from the store by having just one size of each product on the floor to keep it from looking cluttered.
As a note, if you’re starting conversion rate is truly abysmal (think 15% or lower), you should check your marketing. You may be mis-marketing your store, bringing in shoppers expecting something completely different than what you offer.
With these tips and tricks in mind, you should rethink your marketing and communications if your starting conversion rate is 15% or lower.
Mobeo provides a powerful way to utilize hyper-local ads to drive traffic in-store and pick your products off the shelves; talk to us today.
