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Why Brands Need To Be Selective When Choosing Retail Partners

  • Written by  Danny Essner, NuORDER

0aaaDanny Essner NuORDERAt a time when online shopping is at its peak and Amazon is the dominant name in retail, traditional retailers like Walmart are pulling out all the stops to up-level their e-Commerce channels, brand reputation and customer loyalty.

This year, Walmart launched an online outdoor-specific “store” on Walmart.com that featured high-end outdoor brands already sold through Moosejaw, a small outdoor retailer Walmart bought in 2017.

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Walmart began selling premium brands’ outdoor equipment on its web site, but not long after some of the brands, including Leki, Deuter and Black Diamond Equipment, pulled out of their partnership with Moosejaw — and therefore Walmart — after getting heat from their other retailer partners. The traditional outdoor retailers that target the more “serious” outdoor consumers were fearful that brand association with Walmart would decrease the perceived value, and ultimately deter shoppers and push down prices.

Parents that are planning a family camping trip, for example, are shopping for a very different product than the professional outdoorsman about to embark on a three-week excursion. Outdoor retailers feared that the latter, who previously esteemed Moosejaw’s brands as producers of complex and advanced products, would interpret the Walmart partnership as a shift in target audience — that these brands were now creating goods for the recreational outdoorsman.

When developing a wholesale strategy, brands are likely to be drawn to retailers with household names, but these partnerships may not yield the benefits expected. While partnering with Walmart seemed like a strong sales move for Moosejaw because of Walmart’s wide reach, the partnership wasn’t getting Moosejaw products and brands in front of the right audience.

Walmart’s unsuccessful attempt to sell high-end outdoor brands on Walmart.com provides a valuable lesson for other brands, underscoring how important it is to be selective when choosing retail partners. High-end brands that partner with retailers that lack the same cachet may have a problem retaining customer loyalty, or have a negative stigma attached to their products and brand. The decision to partner with a retailer shouldn’t just be about selling inventory to the masses, but rather finding the best strategic partner to match the brands’ quality reputation and target demographic.

While we’ve seen some brand and retailer partnerships backfire, we’ve also seen examples of retail partnerships that have had huge benefits for brands. For example, online mattress company Leesa Sleep, which originally launched as a direct-to-consumer (DTC) company, partnered with high-end furniture retailer West Elm to offer mattresses in 80+ stores across the U.S. and on the retailer’s web site.

This partnership allowed Leesa Sleep to bolster its sales through West Elm’s brick-and-mortar stores and West Elm’s e-Commerce channel, in addition to its existing DTC business. In addition, West Elm’s high-end reputation and chic, modern style boosted Leesa Sleep’s brand by association and got its products in front of a specific consumer demographic. It also helped the brand achieve greater visibility and recognition.

You may be wondering how West Elm benefited through this partnership. As discussed, retailers are doing everything they can to stay relevant and competitive in today’s landscape, and a piece of the digitally-native, DTC, trendy online mattress market is a step in the right direction.

We’ve also seen Target get it right. In 2016, Harry’s Razors announced its debut into the mass market by partnering with Target, with the goal of making its products easily available to both the online and offline shopper. Harry’s Co-Founder Andy Katz-Mayfield said the company’s values aligned closely with Target’s, citing that both companies appreciate exceptional design, are focused on offering high-quality, affordable products, and always try to put customers first. Since then, this partnership has helped put Harry’s on the map, and get products in front of shoppers that may not have come across the brand in the DTC model alone. This partnership also helped Target explore its success leveraging DTC and digitally native brands, and opened the floodgates for many others.

Finding the right retail partners can make or break a brand’s reputation. Both brands and retailers have much to gain from strategic partnerships, but rushing into ones that aren’t a perfect fit can result in more harm than good. Brands must pick retail partners based on the most cohesive and logical relationships, and not be wooed by size, popularity or legacy. When all the most important factors are considered, and a balance is achieved, both brands and retailers will reap the benefits.


 

Danny Essner leads Marketing at NuORDER. He brings 15+ years in technology and e-Commerce marketing experience to the NuORDER team, including tenures at TechTarget, PayPal, Magento and MediaMath. Essner is a recognized leader in e-Commerce, demand generation and digital marketing, and has taught courses on e-Commerce at the Fashion Institute of Technology. Essner has a BS from Boston University and an MBA from Babson College.

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