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Have you developed a product that you are ready to distribute to retail market but not sure where to start? Learning Objectives: • Discover how to structure sales calls to retailers, with the best results. • Understand the methods retailers use to decide what products they will buy for their stores. • Find out the common challenges retailers face; how and why they buy. • Uncover the cardinal rules you should follow when making your first sales pitch to a prospective client • Learn the terminology, technology and measurements retailers use to decide which products will make the cut. • Find out how merchandising and pricing works in both chain and independent retailers. • Discover the logistics and supply chain systems of getting products to the retailers’ door.
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Small Business BC Gerry Spitzner | retailSOS.ca
Find me: www.retailSOS.tel
November 26, 2012
Thoughtstarters
Purchasing methods
Distribution
Product
Preparation
retailSOS.ca | Gerry Spitzner 2
Insights for creating, engaging and
keeping your customer
Inputs and considerations to your
business plan
Your questions
Anything you would like to cover?
retailSOS.ca | Gerry Spitzner 3
How to approach retailers
Why and how they buy
What buyers look for in suppliers
What buyers look for in a product
Pricing and merchandising
Retail distribution channels
Your sales and marketing plan
retailSOS.ca | Gerry Spitzner 4
POS = point of sale
POP = point of purchase
WMS = warehouse mgmt system
SKU = stock keeping unit
MOM = minimum order multiple
CPG = consumer package good
retailSOS.ca | Gerry Spitzner 5
IND = independent retailer
UPC = universal product code
QR = quick response code
PO = purchase order
GMROI = Gross Margin Return On Investment
CRM = Customer Relationship Management
retailSOS.ca | Gerry Spitzner 6
EDI = Electronic Data Interchange
EFT = Electronic Funds Transfer
EDLP = Everyday Low Pricing
OTB = Open-to-Buy
POG = Plan-o-gram
RDA = Retail Display Allowance
retailSOS.ca | Gerry Spitzner 7
This packet of thought starters is
just that; a starting point. Let your
mind wander and consider what you
can do to help retailers minimize
risks and maximize profitability.
retailSOS.ca | Gerry Spitzner 8
The 4 P’s of marketing
◦ Product, Price, Place and Position
7 P formula for marketing success
◦ Promotion, Productivity and “Profit-unities”
How will this product generate
incremental sales? And repeat.
retailSOS.ca | Gerry Spitzner 9
What’s the difference between your
customers and your consumers ?
retailSOS.ca | Gerry Spitzner 10
How to sell or why retailers buy; which do
you prefer to learn?
Who are people more likely to believe;
themselves or you?
Who is better at closing the sale; the
potential retail customer or you?
retailSOS.ca | Gerry Spitzner 11
Have you ever had buyers remorse?
retailSOS.ca | Gerry Spitzner 12
Show me the value; or I’ll show you the
door.
What is value in the 21st century?
◦ A function of the bundle of perceived benefits
offered at a given price.
◦ Sell the applied benefits of the benefit you and
your product offer.
retailSOS.ca | Gerry Spitzner 13
Do you sometimes wish you could
just read your buyer’s mind?
Ask; don’t tell.
Stop ‘selling’ and help your
customers buy.
retailSOS.ca | Gerry Spitzner 14
Top line sales and cash flow
Customer traffic
Customer profitability
Staff productivity
Return on investment; ROI
retailSOS.ca | Gerry Spitzner 15
Do we really need that?
◦ does your product fit my current market mix,
◦ do I have the space to merchandise it,
◦ do I have the cash flow (money) to pay for it?
retailSOS.ca | Gerry Spitzner 16
Inventory is the retail gamble
It’s easy to turn cash into inventory...the
challenge is to turn inventory into cash.
retailSOS.ca | Gerry Spitzner 17
Make yourself irresistible to crazy-busy
customers
retailSOS.ca | Gerry Spitzner 18
Complexity brings them to a screeching
halt
They subscribe to the “ If it ain’t broke,
don’t fix it “ philosophy
retailSOS.ca | Gerry Spitzner 19
They think making risky decisions is
career inhibiting
Most of their options seem like near
clones of one another
Not tolerant of stupidity or
incompetence in other people.
retailSOS.ca | Gerry Spitzner 20
Make your presentation in terms of the retailer, your customer.
retailSOS.ca | Gerry Spitzner 21
How they benefit, how they profit, and
how they produce will provide value.
retailSOS.ca | Gerry Spitzner 22
Keep things simple
Demonstrate strong biz case
Minimize the risk
Prepare, prepare, prepare
retailSOS.ca | Gerry Spitzner 23
Taking a look at the initial
purchasing process from the buyer’s
perspective offers invaluable
insight to consider in your own
selling process.
retailSOS.ca | Gerry Spitzner 24
Profit; make money or save time
Want products that turn over at a price
that will make them money
They want to know the repeat purchase
potential, and can it be replenished
quickly and reliably.
retailSOS.ca | Gerry Spitzner 25
How can I keep my customers in the
store longer?
◦ Increases the average sale per customer
Look at products through the eyes of
consumers to meet leading trends
◦ Increased impulse sales = increased average sale
per customer
retailSOS.ca | Gerry Spitzner 26
In addition to mentally preparing for
the meeting, here's a list of some of
the things a retail buyer may expect
to see at your presentation.
retailSOS.ca | Gerry Spitzner 27
What your biz background is
Your Financial means
Number of years in business
Geographical limitations
◦ What area can you physically cover and ship to?
Always remember while you are qualifying
them; they are qualifying you. Know, like, trust.
retailSOS.ca | Gerry Spitzner 28
Do not expect the retail buyer to know
everything about the product category.
◦ Come in with some facts & market research.
◦ Sales trends in the category, consumer research.
◦ Trend watching; help me with what’s hot.
◦ Tell me about something new or up and coming.
◦ What’s happening in the marketplace?
retailSOS.ca | Gerry Spitzner 29
You need to know my customers.
I do.
Do your market research ahead of
meeting me and then ask me.
retailSOS.ca | Gerry Spitzner 30
I need to know your Advertising and
promotions plan.
How you are going to educate my
customers about your product and get
them to try it in my store?
I don't have these answers for your
product, you do. Or you should.
retailSOS.ca | Gerry Spitzner 31
Can you replenish quickly; do you have a
solid supply chain?
Speed to market just as important (if not
MORE important) than the shelf price or
cost of an item.
Your supply chain to the MFR. becomes part
of my supply chain and I care what it is.
retailSOS.ca | Gerry Spitzner 32
Objections and roadblocks
◦ Objections are signposts that lead you step-by-
step toward closing the sale.
Understand your customers situation
◦ Help me move product and make money; frame
your sale this way.
◦ The buyer is dealing with limited shelf space
retailSOS.ca | Gerry Spitzner 33
Shop the store ahead of time
Understand the strategic positioning of the store
Keep things simple; make your presentation short and snappy
Don’t show everything you have at once. Too many choices confuses the buyer.
retailSOS.ca | Gerry Spitzner 34
The answer is no...
If they feel pressure from you,
If they feel like you're trying too hard to be liked,
If they don't think you understand their business,
If they think you’re focused on what’s in it for you,
If they get overwhelmed by what you're saying.
retailSOS.ca | Gerry Spitzner 35
What you say and how you deliver
your “pitch” will make all the
difference...
retailSOS.ca | Gerry Spitzner 36
Where else are you selling this product?
◦ What makes it sell?
◦ What problem does it solve?
I need to know why your product will be
wanted by my customers.
◦ Is there a “market match” to my market?
◦ What does it ultimately help my customers
achieve?
retailSOS.ca | Gerry Spitzner 37
Is there a need or a market?
Or both?
A need alone does not = a market;
Desire does
And desire is the sweet spot where the market is.
retailSOS.ca | Gerry Spitzner 38
Push or pull product?
What is the barrier to entry?
Is your product future proof?
What is the life cycle of product?
retailSOS.ca | Gerry Spitzner 39
Taste, health, ingredients, appearance,
sustainability, preparation, packaging,
customer value...etc etc.
All buyers do things for their own
reasons, figure out what the buyer wants
and then provide it for them.
retailSOS.ca | Gerry Spitzner 40
A retailer’s shelf space is their
commodity.
Add interest and ‘excitement’ to their
stores with new products and value.
Will this item make my store more
appealing?
retailSOS.ca | Gerry Spitzner 41
Must be easily understood by store staff
and consumers.
How & Who will educate my customers?
What retail price can I get for this
product?
retailSOS.ca | Gerry Spitzner 42
The retail pricing approach depends on
the product and the buyer.
Some look at product first;
◦ then see if they can ‘carry’ the price
Others look at cost first;
◦ they are judging what the selling price would be
and if a fit to their market or match in a category.
retailSOS.ca | Gerry Spitzner 43
Setting the right price for your
products and services requires
balancing merchandising, pricing,
placement, packaging, and
promotion.
retailSOS.ca | Gerry Spitzner 44
Know your competition
Do not compromise on your price
Know your taxes; HST to PST/GST
Wholesaler upcharges
Brokers fees
Include all your costs
retailSOS.ca | Gerry Spitzner 45
Mark up & margin. What’s the difference?
All of these terms can get confused in
the conversation.
◦ Gross profit percent; GP%
◦ Gross profit dollars; GP$
◦ Gross margin percent; GM%
◦ Gross margin dollars; GM$
retailSOS.ca | Gerry Spitzner 46
Tamper proof packaging
Display racks and trays
Display packages with a window
Off shelf areas for new mix
Must fit on shelf in section or category it
is going to be merchandised in
retailSOS.ca | Gerry Spitzner 47
Plan-o-grams & compliance
Package size/dimensions
Photos
UPC code
UPC code that stays on package
Packaging is effective and worthy of
shelf space
retailSOS.ca | Gerry Spitzner 48
Retail distribution channels consist of some combination of producers or manufacturers, agents or brokers, wholesalers or distributors, transportation, importers, and retailers.
retailSOS.ca | Gerry Spitzner 49
Three main supply chain channels...
◦ What is your cost to ship to your customer?
Wholesalers
Direct Store Delivery; DSD
Self Distributors; Chain
retailSOS.ca | Gerry Spitzner 50
Department stores
Mass & Big Box
Specialty & Discount
Catalogue & Internet
Grocery & Drug Stores
Convenience stores
retailSOS.ca | Gerry Spitzner 51
Within each retail category; 3 types
◦ Chain
◦ Banner stores
◦ Independent stores
Who exactly is your ideal customer?
◦ Who is your end consumer?
◦ Where and why does he or she buy?
retailSOS.ca | Gerry Spitzner 52
Is the product WMS friendly?
Case and product UPC
Dealing with concealed damages
Case pack; smaller MOM’s?
Logistics or transportation charges; how
are they determined?
retailSOS.ca | Gerry Spitzner 53
Consider using a professional agent,
broker or wholesaler.
◦ When you don’t have your own sales team or sales
is not your strong point .
◦ There is a cost; however they have connections
and already established relationships.
◦ Some wholesalers have their own sales dept. that
you may be able to “tap into” for representation.
retailSOS.ca | Gerry Spitzner 54
A successful marketing plan doesn't
have to be complex or lengthy, but
should contain enough information
to help you establish, direct and
coordinate your marketing efforts.
retailSOS.ca | Gerry Spitzner 55
Endure long receivable cycle
Provide dating
Provide prompt pay discount
Payment by credit card
Even risk not being paid
retailSOS.ca | Gerry Spitzner 56
Provide a listing allowance
Prepay freight; delivery to door
Clear up damages and returns
Have a plan for recall
Sign a vendor agreement
retailSOS.ca | Gerry Spitzner 57
Use a wholesaler or broker that specializes in your product category
Referrals are the way to go
Value in a short term incentive
Becoming the retailer & go online
The use of online business media
Carefully consider consignment
retailSOS.ca | Gerry Spitzner 58
There is a stumbling block...for
importers.
National chain retailers have their own
import department.
Why do they need you?
retailSOS.ca | Gerry Spitzner 59
Now what or what now? …
Your outlook is a matter of your
positive attitude and willingness
to help.
retailSOS.ca | Gerry Spitzner 60
How can you?...
Help them make money
Save them time
Make them feel safe
Make them feel special
retailSOS.ca | Gerry Spitzner 61
Confidence is the #1 factor ◦ in determining what, from who and where retailers buy...
quality is #2,
service is #3
selection is #4
and price is #5
retailSOS.ca | Gerry Spitzner 62
The approach to IND’s and Banners is
different than approach to chain...
Chain retailers like to act like small
retailers
IND and Banner retailers look for
products not in chains
retailSOS.ca | Gerry Spitzner 63
Just because you are new, doesn’t mean
you are not worth the chance.
Retailers need new mix to create,
engage and keep customers.
Increase impulse sales and profit
retailSOS.ca | Gerry Spitzner 64
Decide first if you want to approach IND’s,
banner or chain retailers.
Then determine your exact ideal retail
customer and method of distribution.
retailSOS.ca | Gerry Spitzner 65
Start a sales & marketing plan.
Understand your target market and it’s
buying motivators.
◦ Retailer (your customer) and end consumers
Who, what, where, how and why?
retailSOS.ca | Gerry Spitzner 66
Define your unique value proposition
and keep it current.
Focus on benefits not just features.
◦ Value is the bundle of perceived benefits offered at
a given price.
◦ Consider the applied benefits of the benefit.
◦ Your UVP should include what you bring to the
table.
retailSOS.ca | Gerry Spitzner 67
Retailers are looking for new products to
differentiate their stores...
◦ They don’t have time to find them;
◦ They need you to help them find the
products and then help them “move” the
inventory...
This is your opportunity!
retailSOS.ca | Gerry Spitzner 68
Your evaluation is appreciated...
Want a copy of this presentation with my
speakers notes?
E-mail me; [email protected]
retailSOS.ca | Gerry Spitzner 69
Follow Twitter: @passion4retail
Connect LinkedIn: Gerry Spitzner
Web: retailSOS.ca
Blog: gerryspitzner.com
Email: [email protected]
Online Biz Card: gerryspitzner.tel
Online Biz Card: retailSOS.tel
retailSOS.ca | Gerry Spitzner 70
retailSOS.ca is a Vancouver-based retail consultancy guiding small business owners to create, engage and keep great customers by doing the right thing really well.
Gerry Spitzner works as a management consultant supporting retail and small business owners to achieve results by aligning their vision and implementing marketing strategy with operational execution.
Drawing on 35+ years experience in multi-site retail operations, independent store ownership and the wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of ownership and business development to retail and small business owners to achieve growth objectives.
retailSOS.ca | Gerry Spitzner 71
For mfr agents info: http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html
For list of mfr agents; Google key words; *manufacturers agents vancouver bc*; or *{food brokers} vancouver bc*
For wholesalers; use Google key words; *wholesale (your product category i.e. clothing) vancouver bc*
retailSOS.ca | Gerry Spitzner 72
WalMart Vendor agreement:
http://www.walmartstores.com/Suppliers/248.aspx
Canadian Tire vendor agreement:
http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/Suppli
erRequirements.aspx
Target vendor agreement:
http://img1.targetimg1.com/wcsstore/marketing/ca/company/image
s/canada/pdf/Vendor_Online_Agreement.pdf
Home Depot vendor agreement:
https://homedepotlink.homedepot.com/en-
us/Related%20Documents/Canada%20Supplier%20Terms%20and%2
0Conditions02-04.pdf
retailSOS.ca | Gerry Spitzner 73
For QR codes: www.qrstuff.com
For bar code info; www.gs1ca.org
Retail associations: Shelfspace - The Association for Independent
Retailers http://www.shelfspace.ca/
Retail Council of Canada: www.retailcouncil.org
NRF - National Retail Federation; Global retail http://www.nrf.com/
retailSOS.ca | Gerry Spitzner 74
Sales questions: www.gitomer.com
Sales and personal development: www.briantracy.com
Retail, sales & marketing and small business: www.donaldcooper.com
Retail, sales & marketing and small business: www.retailwire.com
retailSOS.ca | Gerry Spitzner 75
Sales & Marketing: www.raintoday.com
Trends: www.trendhunter.com
Trends: www.springwise.com
Trends: www.trendwatching.com
Pricing and margin definition:
http://en.wikipedia.org/wiki/Gross_margin
retailSOS.ca | Gerry Spitzner 76
Little Red Book of Selling; by Jeffrey Gitomer
The Sales Bible; by Jeffrey Gitomer
www.gitomer.com
Be Different or Be Dead; by Roy Osing
www.bedifferentorbedead.com
Unmarketing: by Scott Stratten
www.unmarketing.com
Enchantment: by Guy Kawasaki
www.guykawasaki.com/enchantment
retailSOS.ca | Gerry Spitzner 77