The Buyer's Mindset

3 Times You Should Say "NO!" To A Retail Distribution Deal

I wish more vendors/brands were willing to say “no” to retail buyers because the deal didn’t benefit them.

For the ones who did say no to me and stated their reasons, I respected and admired it. One reason I would hear would be because the brand was afraid of deteriorating their brand and angering their more premium retailers. Obviously I’d try to work with them to come up with a solution that would preserve their brand equity and my plans for them in my assortment, but if we couldn’t reach a win-win agreement, I understood the reasons why and never faulted them for it.

I WISH more small vendors said “no” to me. Here are some occasions when vendors SHOULD have said no, but didn’t.

1) Vendors who were in no financial position to be doing business with a major retailer. For example, those who agreed to sell to Target but had to stretch themselves to fund production. Or those who could not handle the cash hold we placed on new vendors. Yes, retailers hold back some of your invoice payment (amount varies, but it can be as low as $5,000 or as high as in the tens of thousands) to cover chargebacks or other fees.

2) Vendors who would have to take a substantial hit on their margins and/or lower their wholesale costs much lower than they had planned. Desperation does strange things to people, include making concessions that would hurt their profitability and long-term sustainability. Stick with the margins you budgeted for yourself at the onset of your business. Rarely does it make sense to lower your wholesale costs too much. Because that margin will already be eroded by the unexpected costs of doing business with that retailer. So to start off with a deflated margin only hurts you long term.

3) Vendors who have an untested supply chain and/or little manufacturing experience at high volumes. Many vendors said “yes” to me and hoped for the best when production time rolled around. Hope is not a strategy. I’ve seen many vendors flop because they couldn’t get inventory to DCs in time because they failed to foresee certain hiccups, resulting in penalty fees for late delivery. Or other vendors would learn that their factories couldn’t produce consistent quality product at high volume levels and when those vendors failed quality testing, I’d kick them out of the assortment, leaving them with unsalable inventory. Nothing incurs more wrath from a buyer than poor execution.

So don’t be afraid to say no to retail buyers. It is not closing a door, but rather, a step towards building a long term relationship.

They’ll respect your sound business judgment and think more favorably of you as a future business partner. Credibility is in short supply in the vendor community. Saying “no” can build more credibility than you realize.

How I Got An Order From Walmart in 20 Minutes (True Story!)

Last week, I was in Bentonville, Arkansas.

Have you ever been there? I haven't. And I was excited to go. Walmart and Sam's Club are headquartered in Bentonville and give the town its storied history.

I was there to lead the pitch to Walmart and Sam's Club for a client. It was such an interesting and positive experience that I knew I had to share it with you! Whether or not you intend to sell to Walmart or Sam's Club, this experience is still worth reading about. 

I'll start with the meetings. We had 3 Walmart meetings and 2 Sam's Club meetings. We met with both the Senior Buyers and Buyers for our categories. Within 20 minutes of our first meeting with a Walmart Sr. Buyer, we received a commitment for Feb 2016. My client laughs when she tells this story, but the commitment came so fast I didn't believe it. I actually asked the Sr. Buyer to clarify, "So when did you say you will be making decisions for the February assortment?". His response, "I just did. Your brand is in our assortment." OH! 

Retailers' Love Affair With Wellness & Sustainability

It is official. Wellness and sustainability are key areas of focus for major retailers. The masses have spoken. Natural, organics and sustainability are no longer niche preferences. It's gone mainstream.

Walmart has stated these as their top priorities. And Target has announced a very similar focus to Wall Street. If you visit the websites of these two retailers, this focus is prominent. 

Grocery retailers and national drug stores have also claimed a stake in this growing market. Everywhere you turn now, you can't miss this growing trend. 

And brands are responding. Nestle, General Mills and major CPGs are pivoting to align with the shifting trends in "better for you" foods. And the Fancy Foods Show in June was dominated by natural, healthy foods.

This blog post focuses on Target's journey into wellness and sustainability. 

Click to read more and watch Target's presentation on Sustainability. 

Why This Brand Is On Fire

FreshKids ~ Healthy Snacks for Healthy Kids: Follow this brand in Instagram

This brand "gets" it. It understands what it takes to emotionally connect with and excite its target consumer, Millennial Moms. 

It understands that Millennials value healthy lifestyles and seek natural, gluten-free foods for their families. It also understands the Millennials influence food trends among older generations. (Food trends)

It understands that in order to make sure kids are eating healthy, it has to also take action outside of homes - and work directly with schools. (Social Responsibility trends)

It understands that product formulation and sourcing transparency are critical measures of authenticity. (Consumer trends)

And it understands the role branding and packaging play in bringing these values to life. (Packaging trends)

Retailers are tripping over themselves to work with this brand. Why? Because it aligns with so many macro-trends and retailers' growth strategies - specifically, it targets the Millennial consumer. 

The Millennial consumer is the most coveted consumer segment in retail in 2015. They have 21% of direct consumer discretionary purchasing power ($1.3 trillion annually). About 40 million Millennials are already parents. And 9,000 Millennial moms give birth every day.* 

While Millennials do their pre-shopping research online, 82% of them prefer shopping in brick & mortar. One Millennial said “You want to touch it; you want to smell it; you want to pick it up.”**

What does this all mean for brands? If your brand positioning and product line are not relevant to this increasingly important consumer, your brand will not be gaining new retail distribution. You will not gain the attention of retail buyers. This is the current mindset of retail. This is now the hurdle for which your brand needs to overcome. 

Take the time to review your brand strategy. Determine if an update or "refreshening" is needed to gain relevance to this segment of increasing importance to all retailers. Look at your innovation pipeline. Are your upcoming product launches moving you towards the direction of Millennials? If not, you may want to think long and hard about revising your 3 to 5 year growth strategy. 

 

Cool infograph about Millennials**


Sources: 

*Who Will Win The Battle For the Millennial Grocery Shopper?, Jeff Fromm, Business Journalsk April 14, 2014

**Who Are The Millennial Shoppers? And What Do They Really Want?, Accenture Outlook Industry Report, 2013.

Products To Avoid When Launching Products Into Retail

I see A LOT of product launches. Even in my post-retail buyer life, I remain inundated by new products. 

Each week, I get introduced to, or contacted by, 20-25 new brands. And over 4 years that is a crap load of product! 

There are a few product categories that I see often with little product differentiation. For me, these represent what NOT to launch. Why? Because the market place is crowded and little product differentiation can be achieved through R&D or claims.

Sure, product differentiation can be achieved in these categories. But it is an uphill battle for new brands with limited funds or access to R&D. 

HERE ARE THE TOP 5 ITEMS THAT GET PITCHED TO ME:

Meeting With The Buyer? Avoid These 5 Common Mistakes

5 mistakes to avoid:

1. Don’t fail to walk through the store one last time.  And Google everything you can about that retailer. Buyers want do business with representatives that are knowledgeable about both their store and their business.

2. Don’t inflate volume or sales forecasts. Be accurate. Base it on sales history.

3. Don’t squander your time.  If you have 30-minutes, plan for the meeting to start 5 minutes late after introductions and pleasantries, then earmark 15 minutes for presentation and 10 minutes for interruptions/Q&A.

4.  Don’t forget to discuss how your brand will drive retailer’s needs.Address how your brand drives sales, profitability and foot traffic in that retailer’s stores.

5. Not listening! Know when to talk, when to shut up, and when to back away. Constantly badgering the buyer to hear your point is not going to win you points.

Important Tips For Securing A Meeting With A Buyer!

5 Practical tips for landing a meeting with a buyer.

Step 1: Mail 2 to 3 sets of product samples representing your entire line. Include in the box, a color copy of your PowerPoint presentation and a cover letter addressed to the buyer bullet pointing the ways your products will drive the buyer’s assortment’s financial performance.

Step 2: Within 2 weeks of mailing the sample package, follow up with an email to the buyer. 

Step 3: After 7 days, call the buyer to follow up and request an in-person meeting.

Step 4: In the event you are able to get feedback on your submission, take this feedback to heart and decide whether you will act upon it. 

Step 5: If you do not hear back from the buyer after either Step 3 or 4, fret not. Sometimes it is a matter of timing. Follow up once every 6 weeks, but only with newsworthy updates. 

From The Buyer's Perspective: Does Your Personality and Experience Play Into The Buyer's Decision Making Process?

I always say there are 3 factors buyers care most about when evaluating new vendors. These are:

  1. Where is your product line selling and how is it selling in those stores (i.e., Performance)?
  2. How are you supporting your sales (i.e., Marketing)?
  3. Are you a good vendor partner (i.e. Execution)?

So does your personality and experience factor in to my decision? Absolutely. #3 above is important. It gives me insight into whether I can trust you and your company to deliver on your promises. If you have experience in delivering on promises, most notably if you have experience working with other retailers of similar size and logistics, then I’ll be more likely to award you business.

Featured Buyer Profile: “With So Much Focus Moving To Online Shopping, You Have To Think Beyond How Your Product Will Look 'On Shelf'."

Who would you give the Product of the Year award to?

I am a huge fan of the AquaFarm, by Bay Area startup Back to the Roots. It’s a closed loop, self-cleaning fish tank and at home aquaponics system. As an urban dweller with limited outdoor space, this has been a great way to have my very own sustainable garden.

Featured Buyer Profile: “A Differentiated Product With A Clear Consumer Need is More Likely To Win Shelf Space.”

Who would you give the Product of the Year award to? 

2nd Street Creamery’s Can’t Tell Me No! Cookie Dough Ice Cream.  I’ll admit it – I’m an ice cream addict.  The geniuses at 2nd Street Creamery have loaded this flavor with tons of chunks of chocolate chip and double chocolate cookie dough pieces.  But the best part is the ribbon of sugar cookie dough swirled throughout the entire pint.  Yum!