Shifting The Balance Of Power At Retail
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This article explores pushing the boundaries of your own retail comfort level and looking at channels that aren’t necessary alternative, because they are already selling products from your category. I’ve got 2 great examples of retailers in this story – and as the title suggests – they might hold the key to big dollar and lots of leverage in general!
I never pass up a good analogy to help myself understand a complicated story, and spice up a boring one. The growing use of private brands (or private label) by retailers has become the key story of this new era in retail marketing. There are so many different stories and perspectives floating around, I think what gets lost in the buzz is the underlying reason of why retailers have turned to private brands. So what does retailer’s private brand strategy have to do with the NFL?
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SUMMARY:
It started with Tivo’s announcement of a marketing partnership with Best Buy last July, and gained steam with Walmart’s recent acquisition of VuDu, and escalates with Tivo’s new big news on March 2nd. The next big battle in Consumer Electronics and TV’s is coming closer.
The reason I share this article with you is that you don’t have to be selling TVs or set top boxes to walk away with ideas that you can apply in your own brand/business.
HOW CAN YOU ADVANTAGE A PARTICULAR RETAILER?
The key lesson here in the pursuit of Retail Leverage is to ask (and answer) the question – “How can I advantage a particular retailer versus their competition?” Get over the battle you are fighting against other brands – THE RETAILER DOESN’T CARE. The real story is the retailers fight against each other.
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In order to effectively compete, challenger brands must learn to package innovative product offerings together with marketing programs designed to represent at least one of the following four forms of retailer financial growth:
FOUR WAYS TO OFFER RETAILERS FINANCIAL GROWTH:
1. Increase overall category demand
2. Increase the attach-rate of high-value complimentary items
3. Motivate a “trade-up” within the category
4. Help a given retailer win the war against another retailer
The most difficult thing for brands like Glad and Hefty is viewing themselves as challenger brands when their histories have been more reflective of the rare “power” brand.
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SUMMARY:
I found a great resource that fills in the blanks on Circuit City’s demise from a person I follow on twitter, @DonEames . He is a former Senior VP of Best Buy, and now has his own management consulting company. Even though he was inside the key rival of Circuit City, I believe he had front row seats to the demise. His analysis would be politically tough for a Circuit City insider to provide, especially given the it was just a year ago that the final stores shuttered.
Check it out – it is called “CIRCUIT CITY SIX: Six Fatal Mistakes of a Once “Good to Great” Company”. It is a quick and to the point read. I found it to provide valuable insight to both retailers and brands alike, and for that matter, consumers who used to shop there (or avoid it).
