Friday 4 January 2013

Keeping independent shops independent - a new business model for 2013?

More than 50 of Itteringham's 120 residents work in their local shop voluntarily, helping to sell locally grown produce first stacked on its shelves in 1637 (Full details and pics here).

This local community's efforts to keep a village shop open by agreeing to work free indicates the degree of help some traders need in order to survive the combined pressures of flatline demand, consumption cut-backs and price-cutting by the multiples.

Whilst these moves may help on the cost-control side of the equation and with suppliers unable to justify lower prices for independents, those whose brands' viability depends on 'full' distribution, need to find ways of helping a retailer to address the sales-driving side of the equation.

In other words, ways must be found of helping the independent retailer to develop the good shop-keeping skills already established by the multiples. Retailers need the help, but under the current business model, suppliers cannot justify the cost of the call, given the size of resulting order required to break even.

However, given that our advertising effectiveness requires adequate levels of distribution and our brand may benefit from in-store discussion and even demonstration, then surely it would be realistic to regard part of function of the brand's presence in independent outlets can be to augment the marketing message and its effectiveness. We should therefore consider writing a proportion of the cost of call off to the advertising budget.

In this case, covering 50% of the cost of a retail call would translate into a 50% reduction in the size of order required to break even.

I leave you to ponder on the potential for shopper marketing initiatives and new variants that could be explored and even refined in readiness for sophisticated application in selected mults....

Support independent retail, you know they could be worth it...!

...and in a year like 2013, anything is worth trying..

Meanwhile, have a great weekend, from the NamNews Team!

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