Today’s consumer goods market is crowded, with both
well-established players and new disruptors vying for greater customer share.
Amidst all this activity, large retailers like Target and Best Buy are
reviewing hundreds if not thousands of suppliers for any given category as they
make choices about what to order and how to optimize their supply chain.
Against this busy backdrop, how can any brand — especially a
newer, less-established one — make its voice heard and grow orders?
Brands must act as their own advocates and deliver
data-driven recommendations to retailers in order to stand out. Advising your
retail partners on what to order might seem intimidating at first, but the
reality is that optimized assortments and inventory levels will be a win-win
for both of your businesses. By taking control, brands can gain a competitive
advantage and better serve end consumers.
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Here are four tips to help you succeed in growing retailer
relationships using data.
1. Speak The Retailer’s Language
Everyone uses metrics to evaluate performance, but the
“same” metric might not be calculated the same way from retailer to retailer,
or how your own internal teams calculate it. For example, Weeks of Supply (WoS)
can be calculated based only on units on hand at the location, or take into
account units that are in transit or on order, or a variety of other nuances.
Another common example is fiscal calendars, with retailers choosing how “their”
weeks align to weeks in the calendar year, what day to start the week on, and
more.
It may be difficult to keep track of all these differences,
but brands need to internalize the distinctions and effectively speak each
retailer’s unique “language” to gain their trust. Demonstrating your knowledge
of how they look at the world will build confidence in the data and
recommendations you’re presenting and help influence their decisions.
2. Tell Them Something They Don’t Already Know
There are two components to this point: first, don’t assume
knowledge on behalf of your retailer and second, think about the data that only
you have access to.
It can be easy for new brands working with retailers for the
first time to assume that an industry stalwart like Walmart has perfected its
ordering — after all, they have years of experience and teams of data
scientists. But the truth is, with so many brands and SKUs on the market today,
even the biggest retailers don’t have the resources to devote to optimizing
every order.
Additionally, a retailer only has access to data from its
own stores; in contrast, brands have the complete picture of consumer demand
across all channels. As a brand, you are the foremost expert on your products
and which sell well (or don’t) in which geographies, so don’t be afraid to
shape individual retailer strategies based this data. It will capture their
attention and elevate your position as a value-added partner to them.
3. Make Your Insights Jump Off The Page
The purpose of using data is to derive insights, but if you
throw a complex spreadsheet filled with hundreds of numbers at your retail
partner, you’re not making it easy for them to see the big picture —
and the value you’re bringing.
Make sure the way you’re presenting your data is visual,
digestible and compelling. Remember, you only have a few minutes to grab a
buyer’s attention, and it’s a risk asking them to put in the effort to see the
insights amidst the numbers. Think of delivering your data insights the same
way you would present your products – an extension of your brand that should be
well-designed and make a memorable, positive impression.
4. Propose A Test-And-Learn Approach
Even with data backing up your recommendations, a retailer
might be hesitant to make changes. In that case, suggest a test first. The
retailer will minimize risk, and you’ll have the opportunity to gather even
more data to support your case.
Here’s an example: a smaller brand was suffering from high
out-of-stocks in certain regions, and wanted their retailer to increase the
related orders to alleviate the problem. The buyer was initially skeptical, but
agreed to a test at a small number of stores. At the end of the test period,
the brand’s hypothesis that a bigger order would lead to more sales was borne
out, and the retailer was convinced to move forward with the recommended order
across their top regions.
Joel Beal is a
co-founder and CEO of Alloy. Prior to Alloy, Beal
was VP of Product at Addepar, a financial analytics company, and has also
worked at Applied Predictive Technologies, which specializes in business
analytics software. He holds an M.A. in economics from Stanford University, and
a B.A. in economics and mathematics from Columbia University.
