Getting your foot in the door with a retail boutique, chain or franchise company can be daunting. However, once you’re able to wiggle your way in with these companies, the reorder rate is high and there is loyalty that will last. In this question-and-answer session, Promo Marketing sat down with two top retail suppliers, Kevin Walsh, senior vice president of marketing and sales, Showdown Displays, Ramsey, Minn., and Chelsea Morris, marketing coordinator, Galaxy Balloons Inc., Cleveland, Ohio, who were willing to give distributors the tips and tricks to make it in this profitable niche market.
Promo Marketing: How does a distributor get into the retail marketplace?
Kevin Walsh: As with any prospective opportunity and client, research is a key factor for success. Understand the retailer you’re approaching, their organizational structure, purchasing decision-makers, retail environment and existing needs. I’m always amazed by just how many practical applications for visual communications present themselves in the course of my average workday. Recognizing these opportunities and how they relate to your target is a key factor for success.
Chelsea Morris: First you must pick the right distribution system to attack. You must display the ability and product line to either add new products to their line or have a line that will increase their profits. There are several channels of distribution and you need to make sure your product line will fit within [one of those channels].
PM: Where do retail opportunities exist? Chain stores, boutiques, franchises? Within all of these arenas?
KW: The opportunities exist in each of these areas and vary in both volume and complexity. Local boutiques may be more accessible, but the revenue opportunities will be more limited. Whereas local, regional and national chains represent large revenue opportunities but require more research and persistence to land.
CM: Chain stores, depending on what channels they sell, are probably the best: grocery, mass market, box stores and large independent chains. The second best are probably the multi-location single owner operations. The small retailer is probably the hardest to sell based on available cash, space, inventory and market awareness.
PM: Who is the key contact when approaching retailers?
KW: Understanding just who the decision-maker is remains one of the most important research elements. Typically this is the owner or store manager for boutiques and local retailers. However, as the size and complexity of the retail chains increase, this responsibility typically escalates to marketing managers, visual merchandise managers and directors of store operations.
CM: Depending on the channel of distribution it can be anywhere from the owner, a purchasing person, a department manager, a designated buyer, etc. Small retail companies usually don’t have a purchasing department because people wear several hats in retail. You need to research just who purchases for each account.
PM: Are there any key points a distributor should present when trying to land the account, such as branding issues, product choices or marketing perspectives?
KW: This is a critical element and key decision process for the retailer. Specifically, it’s important for the distributor to address three key elements. The first is a key understanding of the retailer’s business, its products, customers and positioning. Second, the distributor needs to present their value proposition by accentuating their expertise, creativity and project management abilities. Finally, the distributor needs to build confidence with the retailer in their ability to deliver through their financial strength and partnerships with key suppliers.
CM: The distributor must have 100 percent knowledge of the product they are selling. The retailer is looking for a complete program to take to his customer. When a distributor can give him the complete program, that helps to get the [retailer] to add your line. Product choices and the marketing plan are very important and the item branding can go along way in finalizing the sale.
PM: Why is this a great market to serve?
KW: The retail market is a remarkable opportunity for distributors for several reasons. First, the revenue opportunities are substantial as the individual item costs are significant and the retailer’s perceived value of the products is high. Second, the market for these products is fragmented, leading the retailer to work with the company/individual that best meets their needs. It’s a fantastic opportunity for distributors to generate incremental, profitable revenue with much less undercutting of price than typical promotional items.
CM: The retail marketplace is the first place the consumer goes to purchase products and services. It’s the only place the consumer can purchase unique products, and even after surfing the web for products the consumer still feels better when they go to a retailer and purchase the products. The normal consumer still likes to touch and feel what they are going to purchase before they purchase it. The job of the distributor is to help the retailer with the purchase cost, ideas for advertising the product to the consumer and with placement ideas so the consumer wants to purchase from them.
PM: If you can land an account—what is the typical size order for these types of accounts?
KW: These orders typically range from $8,000 to $10,000, based upon the type of products included and the number of retail locations. That said, in this year alone, Showdown Displays has processed several distributor orders that have exceeded $200,000 dollars.
PM: Are reorders something that a distributor could look forward to with this type of account?
CM: Very much so. When a retailer develops a trust with a distributor they are very loyal customers. If the distributor continues to show an interest in the retailer and the retailer has products that turn X times per year, then reorders are very possible.
PM: What are the most important points to consider when breaking into this market?
KW: Understanding your prospect is the most important point. When you come prepared understanding the prospect’s organizational structure, target consumer and retail environment, you’re prepared to present ideas and solutions that can help build their business. Then, the only other point would be to have dependable 5-star partner suppliers to help you deliver while building this profitable new revenue.
CM: For a distributor to break into the retail market they must have quality suppliers who offer and deliver great products with all the plans attached to make it a profit center for the distributor. The distributor has to have the ability to show the retailer the value of his products and then the products have to help the retailer turn a profit. If the retailer has a successful sales experience and his customer is happy … then the chain of distribution can only continue to get better.
