Market Watch - Retail
How To Approach Stores And Brands To Get Results
If all goes well in Q4, Match Up Promotions (asi/264230) will have a “substantial presence” with a national retailer by early 2014, according to Adam Thornton, the company’s president. The deal, which Thornton can’t reveal until it’s finalized, could bring in more than $1 million each year to the Longwood, FL-based distributor.
For Match Up, the retail sector – which represented 4.1% of total distributor revenues in 2012 – presents a new opportunity for consistent growth. Are you wondering how you, too, can make gains in the retail market? Read on for approaches you can take.
The Way In
Distributors admit getting promotional incentives inside stores – whether through contest giveaways, mid-aisle kickstands, gift-with-purchase tie-ins or premiums handed out with product demos – can be a challenge. And, let’s be honest, if you have no experience working with retail groups, the chances of landing an in-store promotional gig with Target or Wal-Mart are probably slim to none. So what can you do? Where should you look to gain orders from retailers?
Successful distributors say a great way to win business in the retail sector is to partner with a brand marketer or manufacturer who already has ties with a store. A distributor can then leverage connections to set up pitch meetings that might otherwise never occur.
Ryan Kaback, whose company just created denim cell phone covers for a national jeans company, acknowledges that using existing contacts has been a big key for him in landing business with retail outlets. “A lot of times people will leave one company and go to another,” says Kaback, a partner at Custom Logos (asi/173183).
Of course, even with the right contacts, persistence matters, too. Kaback, in fact, believes that one of his sales reps was able to land a large fast food client account simply by dogged effort. “It took us two years to get in,” Kaback says, “and that’s just because the rep was persistent and would constantly show up and bring things and call.” One day the food chain’s vendor made an error and Custom Logos was there to pick up the business.
That kind of luck is rare, though, Kaback concedes, and most distributors insist that cold calls, particularly to large stores, are rarely the way in. “We’re intelligent enough to know what we don’t know,” Thornton says. “For us, it’s easier to partner with folks that have an existing presence in that realm.”
Indeed, it’s better to leverage referrals from marketers you already work with, says Steve Garst, owner of Stamford, CT-based Proforma Promotions Consultants (asi/300094), who’s done just that. Several years ago, a national bottled water company filed for bankruptcy and disbanded. Suddenly, the company’s marketers, many of whom Garst knew, were out of jobs. When some of them found work at other beverage companies, Garst was there to reconnect. Doing so allowed him to pick up a $1.6 million promotional campaign, which used scooters as a contest giveaway. The water company’s bankruptcy turned out to be a great opportunity for Garst’s company, he says.
Another point of entry into the retail sector may come through trade shows, says Zina Santos, co-founder and vice president of business development for Westchester, NY-based August Kitchen, which produces J-Burger Seasoning, an organic gourmet food item. For small companies like hers, Santos says, partnering with a distributor who could offer signage, incentives and in-store demo concepts is ideal, particularly if they’ve previously created them for other brands. Tablecloths, shirts and aprons are all effective promotional product giveaways that have worked during her demos, she says.
Making the Pitch
Even distributors who manage to connect with brand marketers or manufacturers should still enter a meeting as if they’re pitching the retailer directly and make sure they keep in mind a few key things. For starters, distributors should find out everything they can about that particular retailer.
“They need to understand how they go to market,” Garst says. “They really need to know the industry and how the company gets the product to retail, whether it’s through wholesalers or a network of sales individuals out there selling the product.”
In addition, experts insist, it helps to know about product safety concerns, shipping specifications and other details that any promotional item would be affected by as a result of working with the retailer. Vanessa Ting, a former buyer for Target and founder of Retail Path, a retail growth consultancy, thinks it’s also important to recognize the differences – some of which are stark – between one retailer and another.
“I worked at Target, and their way of handling in-store displays is a lot different than Wal-Mart versus CVS versus Kroger,” says Ting. “Target is notorious for controlling the brand of the store.”
Suggesting displays, promotional campaigns or other items that deviate from Target’s brand identity would most likely be an immediate deal breaker. Likewise, proposing a kickstand for a promotion at Costco would undoubtedly end any chance of doing business with that national retailer, Ting says. “If you walk down a Costco aisle you will never see that as a shopper. If I was a Costco buyer and I saw a proposal with a kickstand in it, that would turn me off. It’s like, ‘did you not even walk into my store? If we didn’t get a thoughtful proposal, how will you be a thoughtful business partner?’ ”
Rama Beerfas, owner of San Diego-based Lev Promotions, believes it’s also critical to know a store’s demographics, even if a distributor is pitching executives in tandem with a product’s manufacturer. “Take a look at the website, see the physical property, walk the floors, see what it is they’re selling,” Beerfas says. Also, find out how the store is selling products in conjunction with promotional items.
Besides spending time in a store, gathering demographic and sales data is crucial, too. Companies with loyalty programs often have a wealth of information on customers, Beerfas suggests. Other reports can come from the store’s point of sale system or even security tapes.
Additionally, Beerfas says, all pitches should be accompanied with data to prove the power of the promotion. “If you’re going to pitch something like that you’ve got to be able to back it up with case histories, statistics that will show that what the retailers put into it will be nothing compared to what they get out of it,” Beerfas says. She adds that ROI should be not just about the dollars that one specific promotion brings to the store, but the long-term growth potential of that promotion and similar ones in the future.
Show Samples And Value
When considering products, it’s crucial that distributors suggest items that are not only appropriate to the product they’re trying to promote, but appropriate to the store’s typical customer and to the retailer’s brand identity. Presentations themselves should be tailored to the store’s level of sophistication. Pitching a larger retailer? A Prezi presentation with visuals and virtual samples is likely in order.
Pitching a small chain in your city? A look-them-in-the-eye conversation with tangible samples will go over well, distributors say.
As with many product pitches, retailers – especially those focused on a promotion’s financial return – will most likely want to see mock-ups of promotional pieces. When Custom Logos presented its denim cell phone holder, it offered up a “virtual image of what it would look like,” Kaback says. “That sealed the deal. Without that image I have no doubt that we would not have been able to close” the deal.
Perhaps that’s because retailers are always keen to know what the perceived value of a product will be among consumers, something they’re more likely to gauge if they can see the item for themselves.
“One of the most regular things that occurs when I’m being asked about a gift-with-purchase is perceived value,” says Kaback. With retailers, store shoppers “are paying to get the incentive.” For that reason, Kaback says, a promotional product has to seem like it has tremendous value because “it’s incentivizing [customers] to spend money.”
Finally, distributors caution, don’t be in a huge rush to make your move on the retail market. Taking your time and being thorough matters a lot. In such a competitive market, every impression counts, so do all you can to get it right the first time. As Santos points out, “it’s so hard to get a meeting with retailers, and if you blow that first time you may not get that call back.”