Report Findings: Mobile and Social Media Are Key Influences of Purchase.

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Your Action To Be Taken:
Send this study to your retail buyers to showcase your expertise and add value to your relationship. Include in your email a synopsis of what your brand is doing to help retailers "win", specifically how your social media is helping to drive traffic and purchases in their stores.

Report Summary:
Ever since the dawn of online shopping and shoppers' ability to compare store prices on mobile phones, omnichannel has been a vital focus for brick and mortar retailers. For brands like yours, this meant having to reassure retailers you would manage your online channels to prevent "showrooming".

But now that we understand how consumers really purchase (which is, using online for product research, than buying in person), retailers are now revisiting the omnichannel concept.

For those who aren't familiar, omnichannel is about connecting different channels to give shoppers the ability to keep shopping, whether in-store, online, or on mobile. But a new report from Deloitte suggests that omnichannel may be an antiquated way of thinking. Instead, retailers need to adjust their mindset and start thinking of their business as one entity. 

Markdowns. What they are, why you need to consider them, and strategies for minimizing your risk.

Note: “Brands” and “Vendors” are used interchangeably in this post.

Markdowns are what happens when inventory goes on discount.

You’ll find 4 major types of markdowns in retail:

1) Promotional markdowns

These are discounts that derive from any type of promotional sale such as a temporary price reduction, circular promotion, coupons, endcap promotions and more. 

2) Clearance markdowns

An item goes on clearance when the retailer plans to never stock that item again. Maybe it is an older style that will be replaced by that brand’s latest style, or maybe it’s a poor performing item that the retailer will never stock again. Clearance is basically code for “getting rid of excess inventory”. 

 

What Marketing Do I Need to Do to Impress Retailers?

The momentum of your brand is important, especially for large retailers. Brand awareness does not build overnight, not even with an aggressive marketing budget. Awareness takes time to build. And without it, your product is less likely to sell at shelf. In most cases, a brand less than 2 years old lacks enough brand awareness to support sales at shelf. Therefore, building brand awareness should begin before your product is available in market.

Get comfy. This is a long post. Really, it should be called Marketing 101. 

Where to begin: Start marketing before you launch

Brand awareness building should begin as soon as you lock down your brand name and website domain name. Start building your email list. A free and quick way to set up a landing page to collect emails is http://kickofflabs.com. Building your social media following can also begin early - even without a product ready to sell. Instagram is a great way to showcase your brand personality and begin building brand awareness. These are great ways to start nurturing relationships with your target consumers without spending much money or exposing your IP. Over time these assets will build a following for you. From there, you will have a solid foundation for which to execute a formal marketing strategy.

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.

Bringing Products To Market: Online Programs For DIY Learners

Brand new to launching products? Click the Power Mentoring link above to learn more about Tamara Monosoff's online training programs. 

Learn how with these self-paced affordable home-study programs with step-by-step videos, workbooks, fill-in-the-blank templates, tools and resources. 

The easy-to-follow Online Programs are designed to help you achieve your product development dreams and financial goals FAST.

Trade Show Resource Roundup!

HERE IS A ROUND-UP OF RESOURCES TO HELP YOU CONTINUE YOUR MOMENTUM AFTER THE TRADE SHOW.

 

QUESTION: HOW DO I FOLLOW-UP WITH BUYERS POST-SHOW? 

Answer: Templates for follow-up emails and letters of introduction: http://www.retail-path.com/letters/

 

QUESTION: HOW DO I MAKE SURE I GET PURCHASE ORDERS AFTER THE SHOW?

Answer: http://buyerly.wordpress.com/2014/09/07/trade-show-faq-a-retail-buyer-came-by-my-booth-how-do-i-convert-that-into-a-purchase-order/

 

 

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:

How To Price Products For Wholesale and Retail

There is plenty to consider when creating wholesale and retail price points.

Here are the primary considerations using the most simplest, rudimentary explanation. Note: Pricing for profitability can be more complex. But we are keeping things simple since this is a blog.

1) Bottoms-Up Pricing: Start with your COGS and add in all your other expense line items (e.g., promotions, duties, international shipping, insurance, etc.). Then add your internal profit margin (this is a personal decision). What results is your Wholesale Price. From there, add your retailer margin (most common is keystone at 50%, but it varies by distribution channel and product category) and what results is your Retail Price.

Lessons learned from West Coast Port Delays

As of today (Sunday, 2/22) West Coast ports are expected to come back to life. The backlog will reportedly take up to 8 weeks to clear. So the impact to importers and retailers will be felt long after the labor contract dispute ends.

While all my clients who import felt the pinch (more like 'crush'), some felt it more than others.

The companies that minimized the impact of port closures did so because they could:

  • Divert boats on water to the gulf coast ports (or be ready to pull that lever)
  • Leverage their safety stock in domestic warehouses (one client always keep 6 months of supply on hand)
  • Air ship some inventory as needed
  • Leverage their early (and heavier) orders placed in anticipation of Chinese New Year to fill the unexpected holes due to the port closure.