March 23, 2021
To Sell More Product, Master the Twists and Terms of Retail
Current retail trends place a lot of pressure on companies—high entry costs, higher customer expectations, and complex logistics. In a year when e-commerce is booming, why would anyone share their hard-won success with a big-box or marketplace partner? The answers are fundamental to trade.
In a recent webinar, Flexport moderated a discussion on the topic with Mark Williams, Managing Partner at On Tap Consulting. Ultimately, major retailer partnerships take work, but can result in golden rewards for the companies that make the grade. Here are the takeaways from the webinar, followed by a transcript excerpt.
The Allure of Retail
Modern marketplace retailers may drive a hard bargain at times, but they can turbo-charge sales by exposing products to their own highly cultivated markets. That can lead to banner years for profits.
Then, there’s the magic moment of knowing your goods made it into more customers’ hands—ambition for its own sake, but still totally valid. Flexport calls this seeing your products “in the wild.”
And the Pitfalls
To overcome the stumbling blocks, companies need a firm grip on the complexity of retail partnerships.
While it’s true that transparency makes logistics and operations easier, increased visibility is a tightrope act on the customer-facing side. Prices are easy to compare, and reviews are everywhere. Williams recommends ensuring products are fully baked before going to market. Work out any kinks well before goods hit shelves.
The big retailers know they hold competitive advantages and preserve their positions with stringent vendor standards. The entry costs are steep. A couple decades of retail consolidation means mistakes cost even more. Companies that can’t meet big-box benchmarks get less lift or outright dismissal, leaving them with fewer options for wide distribution.
Mastering retail partnerships takes shrewd strategy from end-to-end. For example, retailers issue routing guides to vendors; twenty-page documents full of requirements for distributing into their networks. Each retailer has its own routing guide—and they’re subject to change.
In these instances, an agile freight forwarding partner can help forge the path into retail distribution. Streamlined booking requests and detailed shipment tracking, including transoceanic and local maps, can ease the strain of meeting cargo and carrier specifications. Exception management tools can help ensure companies satisfy the terms of their agreements.
On the Flexport platform, supplier management tools help keep the supply chain moving. A recent Flexport poll showed that over a quarter of respondents find balancing supply and demand relative to sales forecasts to be their greatest logistics challenge out of the options given.
That makes sense: Currently, a bullwhip effect is jumbling supplier responses to demand trends. Technology can help smooth out a bullwhip effect and help keep brands in good standing with retailers by keeping their finger on the pulse of their SKUs.
Williams lands on a simple tip: limit inventory complexity while onboarding with retailers. That way, as more doors open, sales targets are easier to meet, resulting in the partnership support companies need to avoid burning cash or diluting their own efforts as they grow.
For more practical advice, read the transcript excerpt below. For the full insider dialogue and audience questions, watch the webinar Logistics Launchpad: Getting Your Product into Customers' Hands now.