In Retail Marketing It’s Never Easy To Say Good Buy

Peter Weedfald, President of Gen One Ventures and Author of Green Reign Leadership

Peter Weedfald, President of Gen One Ventures

Peter Weedfald, President of Gen One Ventures

10 principles to help create profitable brand and product engagements

“GOOD-BUY”

The true advantage is having a strong brand reputation and products that are considered to be a good buy. The fate of products and brands today is largely dictated by grades scored through social media report cards. The goal of smart marketers is to ensure a high performing product line. The relationship between brand-product value to price-pull advantage is your greatest demand generator.

“WHOOPS”

Trying to succeed in a new market without brand recognition and a true differentiator is difficult at best.

“TOUGH LOVE”

You gain shelf space but product turns are nothing more than tombstones in the eyes
 and pocket books of consumers. In essence, you now have the largest museum of 
failed products on the planet, you are respectfully in the profit recession business and you cut, cut, cut your price, destroy your margins and ruin your brand.

“GOODBYE”

Your forecasts are now dramatically diminished in the market and face an unsustainable failure. Your price point continues to fall and the merchant, along with the customer, says “goodbye.”

Retail shelf space is a valuable and expensive resource for retailer and manufacturer. The relationship between shelf push and pull, managed turns, margins, forecasts, and promotions is the key to success.

For retailers, there are several key shelf management metrics that lead to successful product engagement. They are based on tried-and-true accounting and marketing disciplines. Best-of-breed merchants study these forecasts regularly to ensure retail and manufacturer success.

Gen One Ventures offers ten principles that can help to create profitable brand and product engagements:

1. Calculate shelf space in terms of space costs, product turn expectations, and product profitability per square foot.

2. Competitive line logic tied to price and profit margin elasticity, especially with respect to competing market forces.

Related story: Do The Deals Ever End?

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Peter Weedfald is President of Gen One Ventures, a sales, marketing and brand-product consulting company. He has served as SVP, Chief Marketing Officer of Circuit City, SVP of Sales and Marketing in North America for Samsung, and SVP of global marketing and EEVP, GM & Chief Marketing Officer for ViewSonic.
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Comments
  • Retail Runner

    Your right… manufacturers should work very closely with and listen to merchants especially to help shape future product lines. Well said.

  • Al Berrios

    You’re spot on, Peter! As a consumer, I always check to see how other buyers are rating and reviewing a product I want to buy. And I check several sources. I read the good, the bad, and the ugly. And I make a decision, sometimes giving a brand a try because I’m the only one that knows what I want. As a social media consultant, I advise our clients to start, continue, and end with customer sentiments towards your products. After you’ve brought a terrific product to the marketplace, manage those ratings and reviews on social media sites proactively, broadly, and fairly – no paying for reviews, guys! – and demand will take care of itself.

  • Tom French

    Peter, as usual, you offer a very insightful perspective. It may not be a comfort to anyone but this is not malaise that is exclusive to CE retail. Talk to an auto dealer or a pet store owner or a book reseller – they are all suffering similar woes. It appears that technology we have pursued so ardently has added more to the mix than its primary function and we are all forced to contend with the implications.
    If success in other industries can serve by example, the opportunity for businesses that service the CE space is one of horizontal integration. By creating a broader, more intricate web of strategic alliances in which a customer can exist that span the gamut of their needs is a powerful strategy to create symbiotic scale while creating a community, comfort, security, convenience and loyalty for shoppers.
    It is not unlike the phenomenon created by the shopping mall, or more specifically those malls built by The Limited. Creating a single destination to serve the broadest range of needs and cross selling or up-selling within “the mall” benefits manufactures, retailers as well as consumers by simplifying choice and adding comfort to the shopping experience.
    While such a notion maybe antithetical to the traditional, vertically oriented CE manufacturers and retailers who like to “own” the customer, it is always good to remember that this and many other value chains exists at the pleasure of the consumer.

  • Stephen Schmidt

    Great insight. I always find your comments timely and useful. So many dynamics in our decision making process, some good, some bad, and some very core and basic to success. If only retailers followed the principles you outlined. Never boring Peter, thanks.

  • Sal Tofano

    Hi Peter,
    Terrific article.
    All of your points and principles of the necessary ingredients that create profitable brands are right on the mark. Retailers from sectors, not just electronics, wold be well served to digest and apply these principles in a rapidly changing retail environment where "consumer is king". This past week as an active and informed electronics consumer, i experienced the benefits of exceptional retailing with my upgrade and purchase of the new Iphone 5. The combination of product knowledge, expertise and service that were provided by both Apple and Verizon are the models. There was an initial problem and Verizon was able to construct solutions that were beneficial and and heightened my level of customer satisfaction. In fact, the follow up included maximum consumer communication via e-mail, text and telephony to insure my satisfaction of product and service.
    If I may also suggest, that in addition to your smart and logical ten principles that retailers create s strategic and compatible shelf management system that maximizes efficiencies between brick and mortar physical operations and on-line e-commerce operations. As consumers are in control with there fingertips across multiple digital landscapes and technologies , there will be a continuous need for retailers to manage the differences between long tail shelf space strategies that are limitless and short tail shelf space strategies that have limitations.

    Best regards,
    Sal Tofano

  • Steve Winokur

    The article captures the profound necessities of innovating in the areas product develop, product marketing and retail merchandising. Unfortunately, most retailers rely on intuition and gut feel when making their merchandising choices. Operational excellence aka implementation excellence at the point of sale is really the "make or break" apex for retailers. Unfortunately I hear more of "why something can’t be done" VS "how it can be done"! In closing, quoting a recent article of Peter’s… "Change before you have to…"

  • Eli B

    Very interesting. I printed out your ten points to cover with several merchants I call on. I believe your list is very inclusive and complete. I just want to see if they can add additional (I doubt it but the discussion will make for a smart and stimulating sales call). Thank you!

  • Steve Hickson

    Peter, terrific piece on the challenges and opportunities faced by today’s electronic retailers. As you well know, the tables have turned and consumers, not marketers, are driving the sales continuum. Digital technologies, smart phones, social media, and the internet have empowered consumers with more data and information then ever before. In many cases, the consumer is better armed than the retail sales person in terms of product benefits, specifications, and competitive differentiation. Your point about "innovation or find alternative avenues for growth" is spot-on. Samsung and Apple have done this very well. Leading the way in smart phone technology, and in the case of Apple, defining a new paradigm of accelerated customer engagement at the retail level. ..while some of the slower moving players like Sharp, Nokia and RIM/Blackberry have struggled .

  • Retail Gal

    Agree with so much here especially regarding retailers confused but trying so hard to re-gain momemtum. Retailers and manufacturers need to work closer together and quickly!

  • Briggs

    The wonderful thing about today’s products and their "collection of music, apps & movies" is the feeding frenzy for similar items. A great app can help sell 10 "OK" others. An amazing song has recommended "similar" songs on the same web page for download. So up sell is not as important as cross selling both on-line & in-store.

    And as iOS begot Android begot Windows begot BlackberryOS…
    formatting the "product" to work on all OS’s and all their device resolutions is the new labor market.

  • Tom Moch

    Certainly the information outlined in this article was industry savvy expert and not one inclined to experiment in today’s tough market which requires laser focus to redeem maximum ROI. Markets and marketing tactics must be flexible by geo as well as market segment. Peter communicates this message in a cogent, easy to absorb context Thank you for the outstanding read Peter!

  • CE Guy

    The points here are all very valid and for some manufacturers, painfully real. Innovate or die is now the norm and the price of admission to the table of retail/etail sales is a strong brand, superior features and competitive pricing. To go the extra mile manufactures must focus on a multitude of new areas including online customer reviews, mobile apps, superior tech support and many others.

  • Bob A

    Thank you Peter for being one of a few who are addressing the greater need to manage and unite together with retail leadership in order to ensure mutual and sustainable growth. Well said.

  • Bob Schulman

    As Peter clearly points out, while our business is in the midst of constant change, the core principles for surviving and thriving include planning, analytics, due dilligence and accurate brand and program assessments. The more things change…the more they stay the same.

  • Stevodee

    Very insightful and I love the ten principles to help create the profitable brand. I’m very interested to hear more about your thoughts and look forward to reading and reviewing your book.

    Stevodee

  • Steve M

    Interesting… your point "competitive line logic tied to price and profit margin elasticity" is the key to winning and or losing… sadly the actual features of the products, perhaps greater than a brand leader does not value up your price point. But always necessary for differentiation even though factory costs are higher. A great read and very informative!

  • Owen Vans

    Will cover all with our prouct marketing team. Thank you, very relevant!

  • Steve A

    It seems the more things change the more things stay the same. The difference today is the immediate impact decision making has on your business, leaving no time to react or remediate. Intelligent decisions if your lucky can lead to rapid growth, bad decisions undoubtedly lead to business decline. Thanks to Peter we have the opportunity to make good business decisions and the privilege to fight another day.

  • Bob T

    Peter’s comments and clarity provide a basic truth for manufacturers & brands in the CE space. And they provide the same truth to all retailers, service providers, non-profits, destinations – in short any organization providing a product/service for which a consumer has a choice. Competitive analysis, strategic planning that is inclusive of the consumer’s entire shopping & buying experience, focus on the best value/price/feature package, tactical planning, and great merchandising supported with intelligent & differentiating marketing – this eco system of planning and acting is a recipe for success in any industry. Thank you, Peter, for thinking holistically.