Stepping Things Up
In her presentation in Bentonville last week, Sam’s Club’s SVP and chief merchandising officer, Linda Hefner, lamented that some suppliers treat the club channel as an afterthought, taking a product that they sold to the drug or grocery channels, putting it in a bigger pack size, shrink wrapping it on a pallet, and calling it a “club pack.” It wasn’t that long ago that such derivative strategies worked just fine – retailers were happy with semi-customized versions of something that worked somewhere else. Not only is that no longer the case, but the number of ways that a given product can be customized have grown. Branding options, including co-branding and private and proprietary branding, have expanded and retailers have pushed suppliers on packaging and sustainability innovations, not to mention price. The fact that retailers have gotten really good at creating, marketing, and in some cases, sourcing products for their own brands has raised their expectations even higher.
What really grabbed me about Hefner’s presentation, though, is where she went from there. Sam’s likes innovation and great new ideas as much as any other retailer, but Hefner encouraged suppliers to focus their efforts on “step change” opportunities in areas such as brand, price, sustainability, and packaging functionality, which increase the value brought to members. In other words, Hefner was asking suppliers to come up with plans for how products will improve throughout their life at Sam’s, perhaps before something entirely new is brought to the table.
The concept of step change is a powerful one at this particular moment in retail, when the journey from early adoption to obsolescence seems to happen at the speed of light, and as social media, digital marketing, and omni-channel options turn brand program debuts into multi-touch-point, make-or-break mega-launches. In this environment, it can be more tempting than ever to focus exclusively on The Big Launch, but where does everything go from there and how will it boost each retailer’s brand vision and add value to their specific customer base? Relying on sequels and already-in-the-pipeline product innovations can’t be the only answers. Not only does that approach put licensors and licensees in cram-down mode with retailers at a time when they expect bespoke solutions, it’s also just plain inefficient to crank-up and sell in the next (really) big thing without first exploring how to extend the value of existing programs. Brand marketers and suppliers that cede post sell-in steps to retailers, or those who believe that their only role is to market, sell, set, replenish, and repeat, are opting out of opportunities to build closer collaborations with retailers, and potentially extend product and/or brand duration in the process.
Join us at Licensing International Expo for out third annual State of Retail Presentation and Store Safari. I’ll detail tools and tactics for brand marketers seeking to retool for new and evolving retail realities. I’ll also share newmarketbuilders’ transformational trajectories for 2012 and beyond, and break down what it all means to brand stakeholders pursuing direct-to-retail or traditional licensing opportunities.
Come for the presentation only or stay on for the retail safari where I’ll serve as a tour guide around a carefully selected group of major retailers that are defining the future of retail in multiple categories. Throughout the day, I’ll facilitate dialog and answer your retail and branding questions. This destination event is a great way for you and your retail-focused teams to kick off your Expo experience.
Date: Sunday, June 10, 2012
Time: 12:30pm – 5:30pm
$80 – Non-LIMA Member
$75 – LIMA Member
Register Early! Space is Limited! Click here to register for Licensing Expo, and for the retail tour.
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