Just Shove It Onto The Shelf

Our colleague, Neil Saunders, posts shop floor pictures on LinkedIn during store visits. When he does, I grab the popcorn and scroll through his post and the comments.

Neil doesn’t mince words when describing both the good and bad of his visits. Recently, he discussed Kohl’s and their relaunch of Limited Too in their stores.

He said in Retail Dive that this is fine and good if the retailer doesn’t just shove apparel onto the shelves.

Well, wouldn’t you know who won the pony? Neil’s reconnaissance mission found a bunch of apparel randomly hanging from the racks like sausage in deli.

For brands breaking into new wholesale accounts, I understand. It’s very exciting to be picked up by a recognized, national retailer.

But, that’s when the real hard work begins.

Because your merchandising strategy is likely disconnected from the retailer’s execution in store.

The reasons are simple:

• You as a brand have very little control over visual merchandising standards + signage.

• The retailer decides on the brand adjacencies and where product sits on the shop floor.

• They usually control markdowns and promotion frequency.

As such, I drew up a Venn diagram with the three key components of an ideal retailer/brand wholesale relationship.

Brands should be aware of these as they negotiate with desired wholesale partners.

Here is a shortlist of things to consider when negotiating:

A = Product Placement:

• Where is the product going to be placed and how is the assortment merchandised?

• Where will your brand be placed on the shop floor and what are your brand adjacencies? For example, you don’t want your brand sitting with a brand that is perpetually on sale.

B = Pricing Strategy:

• What are the contract terms and negotiated markup?

• To what extent will product be placed on markdown? What is the typical promotional cadence of the retailer?

• Is there an “out” for the retailer in case the product doesn’t sell (RTV = return to vendor).

C = Accountability:

• What is the marketing strategy that we will use together to drive awareness?

• Will sales associates be allocated for you at product launch or be stationed in your section?

• Will there be dedicated signage directing customers to the collection?

• Can you bring in your own brand ambassadors?

It’s important to note,  having only two of the three in place is not enough. Not hammering out the details of each is a big miss.

If the product is in a desirable location with a palatable markdown strategy, but with no follow through on marketing, there’s no awareness of the brand.

An agreed upon promotion strategy and marketing plan is in place. But, what if the product assortment is stuffed into overpacked rolling rack? Or, what if the product mix is separated? That is not reflective of what the strategy was when the collection was bought.

Good product placements and strong marketing is great. But, if the pricing strategy isn’t in place then what stops the retailer from marking down the product? Fun fact, one of our clients discovered that a retailer was selling their product at a lower price than discussed. That means lost profit.

Wholesale deals shouldn’t be one sided. As a brand, you have a say and should negotiate. Selling your brand is a win for both the retailer and for you.