For those of us that have been around the consumer hardlines business for a year or more know what a Product Line Review (are better known as PLR) is.  Brick and mortar retailers having outlets nationally or throughout a region, product line reviews are customary for key product classifications.  From a big picture view, the line review process – defined, orchestrated, and by invitation only – is a good thing.
     I continue to be surprised to the lack of effort and strategic planning many of the companies put forth for PLR’s.  With many companies, where the leadership for approaching the line review is misunderstood or misplaced.  My experience suggests Marketing take the leadership role and carefully engage sales leadership to co-pilot the course.  Whatever function might lead the process, the critical part is to have strategic alliance within the organization for support, clarity, and harmony in the direction.
     Product Line Reviews can be daunting.  I think the process is not only important, but provides the best opportunity for a level playing field.  The key point is the process enables a collection of category specific inputs that serve the retailer and the consumer, as well as a preset agenda for suppliers to make the case for their goods and service.

​ For Retailers: it is the opportunity to review the product category in totality from suppliers.  That supplier input is essential for the retail buyer to make an assessment to how the business is performing compared to other retail venues.  There is likely no better authority on specific product categories than the supplier community.  Additionally, the entry of category disrupters (those new or making entry into a product category, bring a fresh perspective to what might be a static segment.)

For Consumers:  the review and vetting process of Product Line Review can (operative word) ensure the best innovations, quality, and price for goods is being offered.  It is important to understand those three elements may or may not be part of the retailer’s value-proposition. To make the point – the clothing selection at Ross Stores will be different than those at Nordstrom.

There are so many nuisances in the approach for a line review.  It is too much to write for clarity in one article.  But I believe you will understand and appreciate the multiple tentacles that need thought and clarity as supplier’s faceoff in the line review process. 
     There are 3 Commandments that are the foundation for a successful Product Line Review approach.  Do keep in mind, these 3 commandants do weave into one another.
 
#1 – Know Thy Customer
     It has been said many times – Know Thy Customer and is Sales & Marketing 101.  You must know your customer very well for the Product Line Review.  You can bet your competition will.
Buyers Goals.  This is important to have that one-on-one meeting prior to the line review invitations being sent.  Thoughtful, planned questions that lead to a discussion on common line review objectives – revenue performance, merchandising space, market-share erosion - to name a few.  Those truly connected to the business should have a good feel for the what is working and what isn’t.  That is more fuel for an insightful discussion.
     There is one simple mantra I encourage everyone to live by - - Buyers are Risk Averse.  Consider the financial objectives they are charged with.  It is not that the buyer is not a “merchant”, but they are charged to meet financial parameters.  Their fundamental objectives typically are around leveraging sales per square foot, gross margin improvement, inventory/turns, and avoid markdowns.  Why would they take a risk on something unknown, unproven, and unconfirmed?   Layer on top of that the buyer doesn’t have unlimited shelf space or endless open to buy dollars.  My point – get rooted with what the buyer’s objectives are.
 
#2 – Know Thy Self
     As simple as it sounds; this can be the most challenging for a business as the line review approaches.  Understanding your companies SWOT analysis, as well as the competitors, is good place to start.  This part goes beyond SWOT and requires deep thought and collective agreement with all business stakeholders.  For ease in making my point, the following are some parameters that might be considered.

• Are there margin challenged products in our mix we would prefer another supplier be awarded?
• Should a or the Brand be considered for exclusivity, a level of exclusivity, or similar positioning?  Does the brand have value to the retailer?  Does providing a brand / marketing plan carry weight.  Equally important; is what can the brand leverage in your favor?
• Is our goal market share, revenue growth, profitability?  Are we positioning for entry into a new category in the same department?  Are there any supply chain issues at hand?  Are we giving consideration to inventory turns, payables cycle and other balance sheet issues?
• The old adage that “you can’t be everything to everybody” holds some truth in this commandment.

#3 – Just The Facts
     While all 3 of the commandments are important, this one is the most powerful.  This commandment has the ability to deliver the stellar results you want.
    I believe the anchor for this commandment was so eloquently stated by W Edward Deming, a visionary business management leader – “Without data you’re just another person with an opinion.”  That says it all, doesn’t it?

Consider this:

• As noted earlier in the first commandment; Buyers are Risk Averse.  Being risk averse means taking the known path.  Not the unknown path.
• Data  -->  Truth  -->  Facts
• The results or output from a reliable data source is Truth.  The truth are therefore FACTS.
• Facts are known. 
• Facts are undeniable. 
• Facts eliminate risk. 
• Remember - Buyers are risk averse.  Enough said.  Agreed?

     What retailers care about is having the goods and services their customers want / need.  It simply is not feasible for retailers to do the groundwork necessary to collect the data.  For most retailers, the majority of data mining is from POS (point-of-sale).  The dynamics of the market basket brings powerful insight to who, what, when and where products are purchased. 
    The missing link is the real voice of the end user.  This is the insight the supplier community brings to the merchandising team.  The retail buyers are seeking thought leadership, product leadership, marketing leadership and the ability to flawlessly execute a program.  It is your opportunity to control the conversation.  All of this is embedded in the product line review process.
     But my hope is your business is constantly evolving and developing exciting new product to serve the end users needs and is something they want and willing to pay for.
     In the new product development process, there is a stage of validation and gathering information from the end user on new product or refinement to existing product (aka; New and Improved).  It would be advised to enlist a professional marketing research firm as a partner.  Having a creditable firm on your team is powerful.  It also eliminates bias, predetermined mindset, and a narrow view of the business segment.  You need a professional third-party firm to lead this charge.  In fact; it could be a very wise decision ​to have them present for the formal line review meeting.

     In closing, there is an art to how these “facts” are presented.  It is a balance of not too much shoveling the facts down the buyer’s throat and being delicate as to avoid an emotional flurry.  This is a delicate process.  A well-thought-out strategy to align with the customers goals / objectives, your company’s objective with fact-based data can bring great results.  Line reviews do have the power to change one’s business for the good or the not so good.
     Here’s to your success for great Product Line Reviews!

     The goal of every consumer products company is to earn the ultimate trust – which is loyalty – with the end user. 
     It is the grand prize in marketing.
     And Amazon is on it’s way to earning the ultimate marketing bogie – Customer Trust.
     The approach Amazon has taken is multifaceted but with a very clear vision.  There are several platforms that standout in my mind that are real and some in late stage development that will continue to widen the e-commerce gap in favor of Amazon.
    
Delivery to Where Customer Wants It
     Certainly; Amazon and other online retailers have mastered the delivery of orders to home and business addresses. 
     With the rash of “porch poaching” thieves taking the deliveries before the rightful owner can retrieve, is gaining national attention.  I have been the victim of this.  Not once, but twice within a two-week period during the holiday season with Amazon a couple of years ago.  The orders were more expensive electronic goods, so not a cheap replacement.  Amazon customer service didn’t bat an eye, and replaced the order without any hassle.  I feel certain any other e-commerce retailer would have done the same.  Amazon is taking a step ahead. . . 

Amazon Lockers are brilliant.

1. Delivery to where the customer will be, not where they have to be.  No need to be home, and no longer have to navigate the business mail room to find your shipment.  Designate the Locker location of your desire for the deliver to address.  The text updates are terrific, and the retrieval of the shipment is simple.  Speaking for myself – I have no desire to lug something needed in a business trip when I can have it shipped to a location that works for me.  Or to check additional luggage to transport holiday gifts to Grandma’s house, when I can have them shipped to an Amazon Locker near Grandma’s.
2. The Lockers solve many problems – delivery theft and convenience of receiving shipment when the customer is ready are just a couple.

           This concept is going to the next level.  Consider large, multi-unit condos / apartments.  Some of these larger developers are negotiating with Amazon to BUY the lockers (brilliant) and the “Lockers” becomes a marketing feature of the complex knowing shipments will arrive, be secure and tenant does not have to be at the “office” hours of operation to get a delivery.  In turn, this must save the management staff lots of time for being a package handler where there is little to no value. 
     Providing options and solutions for delivery is part of an e-commerce value chain proposition.  Amazon is taking it to the next level.  It provides end-to-end trust – Purchase of Product, at Price offered, Delivered on-time, and secured that the shipment is available for the customer to receive.
     When the trust factor is fulfilled seamlessly, that is where loyalty is created.  That loyalty enables great things and momentum to happen in gaining share of wallet.  New products, some pricing latitude, and much more.

​Knock Knock. . . I’ll Let Myself In
Amazon’s latest venture / offering is Amazon Key.  This will truly test the amount of trust the consumer will allow Amazon.

• Amazon Key is the ultimate and most streamlined means of delivery.  It allows for the shipment to be delivered INSIDE of the consumer’s home.
• The service is only available in select markets today.  That has limitations of making it a broad-based marketing advantage.
• Also requires a $250 investment (The Kit) in Amazon camera and compatible lock for the privilege of “in-home” delivery.  “Key” is also being marketed for other service providers to gain access the home when you are not there.  Repair service, cleaning, laundry service, etc.

     I can’t get there on this service – yet.  Our homes are our safe-haven and we guard them carefully.  Without a doubt, thousands of consumers will invest in the hardware and welcome Amazon in to their homes.  Time will tell how this may change, it’s adoption, and it’s success.
     The dynamic at play is huge.  It is the continued evolution or dimensional shift to how consumers will purchase and receive products into their homes. 
     Think about it – Amazon is a service provider of transactions of selling products to the end user that have disrupted traditional supply chain mentality with the use of technology.  Once in the home, that seems like mecca for consumer engagement and countless other products and services they could provide through the single marketing platform.
     Very exciting times and look forward to what comes next as the continuum of consumer products method of reaching the end user will continue to change and shift!
 
Just for a Smile.  Have to pass this along.  Courtesy of the Reddit community….
“It kinda makes sense that the target audience for fidget spinners lost interest in them so quickly.”

Hope you have a great week!

Starting a few months ago with Amazon announcing the purchase of Whole Foods, I have been taken by the blood-letting Wall Street has bestowed across the industry.  In fact; the financial punishment for most in the retail space since this announcement.
     My personal disclaimer on this post:  I am not a retail operator, nor an investment banker.  But I am a successful supplier of consumer goods to retail.  Durable goods, not consumable goods (drinks, chips, etc.).  My thoughts are not to claim supreme answers, but more to offer thoughts from a 10,000 foot view with 3 thoughts.
​
 1.  Stick To Your Knitting    
     Kroger Co. (KR) has become the poster-child for what Amazon could do to the grocery industry by acquiring Whole Foods.  Kroger could do itself good by focusing on making their business (stores and digital) the top-of-mind consumer destination.  With 2,800 stores, multiple store front brands, spanning 35 states, Kroger has a great platform to do mind-blowing things. Amazon’s Whole Foods has some 470 stores and at some point will leverage the power of the digital platform.  I believe Kroger could make some very progressive moves to not only hold share, but grow dramatically.
   I do not discount the power and prowess in operational and supply chain proficiency Amazon has proven.  They meet the consumer “right where the customer wants to be”.  Amazon will certainly carve out their fair share of the grocery market. 
     About a month ago, Kroger announces they will launch a restaurant business called Kitchen 1883.  Hmmm.  Is it me, or does that seem like a lack of focus?  The first prototype is a stand-alone store.  But even if the thought is to integrate a restaurant into stores, is that what the consumer wants?  Another restaurant, particularly one inside of a Kroger?
     Kroger should stick to grocery and take advantage of building a compelling digital model and enhance the in-store experience to serve the consumer.
 
2.  Meet The Competition Head On    
     Things change.  Consumer likes and dislikes change.  Technology has proven to be a great enabler.  Grocery competitors are making moves to prepare for the future. 
      Walmart buys Jet.com in 2016, and recently Parcel, which has a model for rapid delivery to consumer’s front door.  Both significant in Walmart’s goal to compete with fury in the digital retail space.
  In the pure play grocery space, Albertsons announces the purchase of the meal-kit delivery service, Plated.  This is very logical for grocery to have a hand in the meal kit business.  Experts expect this food home delivery service sector to grow more than 70% in the next 5 years.
   With all of this recent activity, Kroger showing no signs of making a correction in course.
 
3.  And, It’s Not Going To Get Any Easier    
     The slim margins in the grocery business make things tough, no doubt about it.  As competition heats up margins will be under increased pressure.   
     Add to the mix the entry and expansion in the US market of two powerful German grocery retailers - Aldi and Lidl.  The pressure on traditional grocers will be intense.  These are serious competitors and have the balance sheet and competitive will to gain significant market share.
 
The evolution of how the grocery industry is going to take shape will be interesting.  There will be winners and losers.  I am not convinced Amazon will rule the world, but they will put points on the board in grocery.  The losers – some will falter.  I have visions of how Kmart could not shift to compete with Walmart in the early days.  Where is Kmart today?

            Some strange things have happened since Amazon announced the acquisition of Whole Foods in June.  In my opinion, it opened the idea that Amazon will rule the retail world.  Initially, grocers took the market valuation hit, but soon spread to other retail segments.
            Really?  Is the traditional retail fear of Amazon really warranted?  I believe the answer is both MAYBE and MAYBE NOT. 

MAYBE:

• Tough Year for Traditional Retailers:  2017 has produced some alarming stats.  Numerous store closings, new store openings at the lowest rate in nearly a decade, and bankruptcies seem to capture the headlines on a weekly basis.
• The Strong Survive:  there is a long list of retail bankruptcies:  Payless Shoe Source, Aerosoles, Rue21, Perfumania, HH Gregg, Gander Mountain and most recently Toys ‘R’ Us. . . just to name a few.  Some have closed their doors forever.  Others are on the brink of “filing”.

     I contend those retailers that are dying have failed to have a solid vision of the future to their customer’s expectation.  Other retail venues have stepped in and filled that void.  In some cases, poor financial maneuvers to put the business in a perilous situation.
     The retail landscape has, is changing, and will continue to change.  And it should be changing.  From a macro view; The Home Depot was the game-changer in the hardware / building materials segment, Walmart redefined mass retail, Best Buy created the mecca for the consumer electronics experience, and Costco created the retail membership venue.  And without a doubt, Amazon is bringing a new dynamic force to retail.
 
Is Amazon the reason for the reshuffling of the retail environment?  Not entirely.  Keep in mind Amazon is only 5% of retail sales (that is excluding food products).  Has Amazon created or filled a void to meet consumer shifts in buying habits?  Certainly yes.  At the same time, there are numerous brick & mortar retailers making a big impact on meeting consumer demand through emerging and developing meaningful, high impact strategies.
 
 
MAYBE NOT
     With approximately 70% of the United States GDP being consumer driven and retail being a significant part of that number, brick and mortar retail will survive and thrive.  But will rely on the strong and nimble retailer.
    I personally believe this is a “golden age” for retail and those of us marketing consumer goods.  For the record, this is not a suggestion to shun digital or web-based retail.  In fact; just the opposite - it will grow and is / will be a formable platform connecting with the end-user of our goods and services.  This is a simple, straight-forward way that we should be supporting brick and mortar retail.

1. If you are not thinking Omni-Channel, You’re Not Thinking – a go-to-market strategy has got to think about the engagement of how the purchaser could interact with the product and the ultimate buying decision.  In-store, social media, or web.  This has become hugely important in our mobile world.
   • Brick and Mortar retail has an advantage for the most rounded personal experience.  The ability to touch product, compare most popular alternatives, logical add-on to product that might otherwise not have been considered.  Powerful and fundamental to buying experience.  The personal experience has not been fully replicated with the online retailer.  The ever-increasing use of video will be a big advantage for the online retail world.

      Seeing this as “the advantage” for brick and mortar will fail.  The competition is simply too fierce.  A woven strategy with digital marketing venues does create a strong platform.

1. Mandate to Think Differently – the merchant with progressive retailers is totally open to new ideas on how to reach the end-user’s purse.  A well-conceived and solid plan is required.  This requires thought, preparation, strategy and ultimately results (top line sales, gross margin, solid supply chain to serve the business demands).
2. Innovate – there is nothing more exciting that new products that improve the user experience.  Those marketing to retail must have a solid plan to bring change to their respective product lines.  Failure to do so, opens the doors to competitors…. And they will come.

 
In conclusion, traditional retail is not dead.  In fact; very much alive and the opportunity to leverage products and services has never been greater.  Retailers do not have all the product & merchandising answers.  They look to seasoned, mindful, experienced marketers to bring solutions to complex challenges.  The ultimate WIN-WIN outcome is at hand.