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No More Backstabbing: How brands and retailers can earn each other's trust
August 30, 2012
It's become a downward spiral.
Lets face it; many retailers don't trust their brand partners, as they see their trading areas become increasingly filled with competitors. If that's not bad enough, the products they sell are showing up on e-commerce sites for slashed prices that the brick-and-mortar storeowner can't possibly compete with. On the other hand, brands are constantly needled for price reduction, special terms, or unlimited variations, while retailers complain that they are not developing enough different and new products to stay competitive.
Can each party change to end this worsening cycle?
It's about building trust. To begin re-building their retailer partners' confidence, manufacturers must re-gain control of their brand and implement policies to protect their brand's integrity. It takes discipline and work, but it's worth it.
Active brand management is critical, because it puts the distribution of a manufacturer's products back in the manufacturer's hands. If the manufacturer determines a certain quality of retailer (especially online) to partner with and sanction to sell their products - while stopping unauthorized vendors - the retailer partner can begin to trust their (partially) exclusive access to those products and that brand. And what little boutique in a small town wouldn't want to be confident in their safety from getting undercut by a price-slashing e-commerce site?
In addition to strictly controlling the use of their brands online (monitoring to be sure their products aren't getting ‘scraped' and displayed on other, unsanctioned retail sites), manufacturers should put in place balanced pricing policies. I know that's a lot to swallow. But setting a standard Minimally Advertised Price (MAP) policy - and tailoring it to balance pricing between brick-and-mortar retailers and Internet retailers - can go miles toward building trust with your longtime retail partnerships. Additionally, it will create parity within the marketplace, which is beneficial to all involved: your brand, the brick-and-mortar retailer, the Internet vendor, and the customer - who matters the most in the end.
Retailers, in response to these disciplined practices by manufacturers, should embrace the new pricing and content policies, and work together to police the marketplace when they notice unsanctioned activity taking place. When this kind of integrated model occurs, balance is achieved within the marketplace.
Trust is built through mutual support and collaboration. The only way manufacturers and retailers can win back each other's trust is to stop the bad or negligent practices that have become rampant in the industry, and start to work together, for one another's survival as well as their own.
Posted by Barry Abraham on August 30, 2012 |
Comments (10)
Industries:
Furniture Retailing
January 8, 2013
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January 8, 2013
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January 5, 2013
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January 4, 2013
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustMarcela commented:
with the exception of the Garfield Movie, of corsue.I mean, who wouldn't want to sleep outside a store all night to get a documentary about one of our *greatest presidents* at a deep discount?And I can't wait to find out the secret link between John Garfield and lasagna.
September 8, 2012
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustAc commented:
Would controlling the amount of dealers in a given area, or distances between retailers help with is? Are there any brand/manufacturers that does or still practice this?
September 4, 2012
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustWoodsman commented:
We got a letter from Flexsteel saying they were going to take action against viloators on the web.
I sent them numerous url's of the offenders shipping "nationwide". This was 2 months ago and nothing has been done.
I guess whip out a e-mail saying something but doing nothing is the best we are going to get.
September 3, 2012
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustAscot Chang commented:
Jaded myopic gum chewing furniture executives,sounds like an invasion of monsters,which is true,the godzillas
Of industry have eaten all the goods,we are left with borax designed by dead and almost dead tv and cooks who know nothing of design or taste.come back miLo weneed you now.
August 31, 2012
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustBarry Abraham commented:
DIV, thank you for your comments - I definitely agree with your statement that "The distribution network of the 20th century is dead." I plan to address that in future posts, as it will be interesting to see what comes about in future distribution models.
CP, great comment and spot on! Crunch Time blog’s Dan Minor and myself have several posts coming in the weeks ahead that address the subjects of distribution, MRP and MAP. So, please stay tuned. In the meantime, take a look at the hdiaccord.org website – they have some fantastic insight on these subjects.
Barry
August 31, 2012
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustDisgusted Industry Veteran commented:
Is this new news? All the North Carolina manufacturers have been destroying the fabric of distribution since the 1970's starting with Johnnie Blackwelder and ending with Furnitureland South. The national network of independents is 10% of what it was in the 1970's. The damage is done. There no longer is a network of independents that can support all the production available. It is sheer pie in the sky to think that the manufacturers will stop selling Furnitureland South---by far the biggest offender, let alone the other price cutters. They reduced our products to a commodity level. They bit the hands that fed them.
The distribution network of the 20th century is dead. Trust isn't going to do a thing to change that. It is a cultural thing in the manufacturing industry. They still haven't figured out that destroying their loyal dealerships destroys their ability to sell. As long as there is so much manufacturing over capacity chasing far too little floor space to support it, you will have desperate sales managers pushing what reps are left to sell everyone. On top of that the products are boring and exhausted because the manufacturers do no want to invest in product development and design. They just want to stick someone else's brand on it. And we all know that none of the celebrity/dead personality/unhealthy cooks have brought not one new thing to our industry.
The industry of the 20th century is finished. Now something new with a newly invented perspective has to rebirth it. But don't think that the players who destroyed it are open minded enough to go in new directions to rebirth it. It will come from outside the empires of our jaded myopic gum chewing furniture executives.
August 31, 2012
In response to:
No More Backstabbing: How brands and retailers can earn each other's trustCp commented:
Barry, you are right. Problem is those with MAP have no teeth. You need MRP and then it must be enforced. Or you can simply control you distribution and then there is no problem. Look at Stickley.
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