Showing posts with label independents. Show all posts
Showing posts with label independents. Show all posts

Wednesday 9 January 2013

Everything is negotiable, when the chips are down…

Keith Ewing, owner of Number Eight Clothing in Stirling, commented that Independent retailers need to "put their heads above the parapet", as his shop was nominated as one of the UK's "top 100 inspiring shops" for 2013 by Draper's magazine. He listed rent-reviews, online, buying and display as key needs in independent retailing.

NAMs could help by sharing their negotiating expertise with appropriate retailers, as follows:

In practice, independent retailers can help themselves to survive by adapting the supplier-approach to business development:
  • Cutting-costs: rent and rates are currently too high in these unprecedented times. Landlords and local government know this and are vulnerable to the ‘walk-away’ threat by retailers. In other words, retailers should calculate the level of rent and rates (seek help from commercial architects that can provide a broader view) that make the business viable, and renegotiate on this basis, ideally via a combination of lower rent and a ‘per cent of sales’ model, to force landlords to share the business risk.
  • Driving sales: develop a strong online strategy by mining your customer records and collecting email addresses going forward in order to extend your reach beyond a shop visit. Optimise supplier help by negotiating better prices, terms and supply arrangement and especially instore merchandising in exchange for customer stats and enthusiastic/ innovative collaboration. Suppliers want you to succeed as a counterbalance to major multiple retailers and are willing to negotiate flexible packages for the right customers.
Being a business consultant to the retailer can optimise the trade partnership and broaden the NAM’s expertise in managing other customers.

Sharing negotiating expertise can help....

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!