Organize Your Offerings
In early October we sold our business and then bought the assets of two consumer products companies to form a new company, Alco Consumer Products, that will provide retailers with the best of the products offered by each company. Through the process of combining these companies, I learned lessons that will help us be successful in the coming years.
The most serious challenge was the lack of structure in organizing product assortments. I asked some of our product managers how they saw the market and the products we make, and their answers were not clear. Did we offer a good, better and best offering with a solid way to differentiate the products and the categories they fall into? I was surprised when they suggested that it really didn’t matter because their customers, retail buyers; they just wanted us to provide a bunch of products they could randomly choose from. Furthermore, in many cases their customers had asked our company to provide certain products, regardless of whether they fit their offerings or ours.
I have been on many sales calls and I appreciate their perspective. In one sense, they are partially right. The problem is that many retailer buyers don’t have the discipline to properly choose or organize their offerings. They also don’t ask their suppliers for product assortments that add up to a full solution. Instead, they pick products based on price, not value. Many buyers also move from job to job so frequently they don’t have time to positively impact product assortments; they just end up buying what was last sold.