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Retailer Business Review Time

By: Greg Seminara,Export Solutions
Topics: Business Review

This is a good time of year to conduct your annual business review with key customers. 2015 shipment records and market share data are now available. Annual negotiations have been concluded for most and retailers have launched their own plans to grow sales in a challenging 2016. The annual Business Review represents a unique opportunity to discuss your business at a senior level, reinforce your reputation as a category expert, and sell the 2-3 ideas that can make a “game changing” difference for your business for 2016.

Senior Management Participation elevates meeting importance. The meeting purpose is to consider strategic issues not normally covered in daily buyer-seller interaction. Participation can include anyone at the retailer who touches your business: buyer, senior buyer, merchandising manager, purchasing director all the way up to the CEO. Suppliers should invite members of their senior management team, depending on the size of the country and retailer. This may translate to a senior level Top to Top at a large retailer or a more informal meeting including the export manager, local distributor, and the head buyer in a smaller country.

Scorecard discussion is the First Step
Discussion of data and trends should reflect key retailer priorities. Frequently, you can source hints from your category buyer simply by asking: What are the key metrics that you are evaluated on ? Most suppliers discover that the buyer is more concerned with service level, inventory turns, incremental promotional dollars than your brands sales trends. Some basic scorecard topics are recapped below What is the retailer’s share of your business versus their overall market share? What factors caused them to gain or lose market share with your brands/categories? What are the gross margin contributions ( percent/value) from your company? Discuss your service level from a logistics standpoint. Critical to remember is that a successful business meeting will focus on forward action versus a rehash of past results.

Establish your Company as the Category Expert- What’s New ?
A major disconnect in the supplier- buyer relationship is that most suppliers focus only on their brands while buyers concentrate on building total category sales and profits. Certain retailers adopt rigorous category management processes with detailed templates for category analysis. Tell the retailer something new ! Suppliers add value by sharing new category insights and trends, not just developments on their brands. Retailers may be receptive to learning about category innovation from other markets, consumer research, new product development work, and environmental/sustainability programs.

Sync with Retailers 2016 Plans
The Annual Business Review is a good forum to learn valuable clues on retailer plans for the year. It is likely that retailers have already announced their 2016 programs with catchy names such as “Great Value 2016” or “Absolute Minimum Pricing”. The meeting represents a chance to ask senior retailer executives their insights on program execution, requisites for participation, program measures, early results, and other new initiatives for 2016. Retailers dedicate significant time to designing their marketing strategy and usually love any opportunity to discuss key elements.

Ask for the Order !
Come prepared with 2-3 Big Ideas that could change the dynamics of your business with the retailer. This could involve retailer participation in a major blockbuster promotion, acceptance of a new line of products, or redesign of the shelf fixture. The annual business review forum helps create senior retailer awareness of the critical issues driving your business.

Beware: Retailer will have an agenda too !
Savvy Retailers will also present 1-2 initiatives where they will request your financial support. Be prepared for the retailer to pressure your company for participation in retailers marketing activities ( magazines/fliers) and concessions in price. In some instances, the retailer CEO/Head Buyer will use the meeting as a “training exercise” to show the buyer how to extract concessions from their suppliers. It is ok to say “no”, but be prepared to share your fact based rationale. Best bet is to create a positive environment for the meeting. This could include an “off site” location or a meeting discussion over a private lunch or dinner. Normally, distributors/brokers have excellent local relationships and can create the appropriate setting for productive, non-confrontational, business discussions.

Summary: Next Steps
The annual business review represents a perfect time to address business opportunities with sufficient time in the calendar year to implement the ideas and achieve your shipment objectives. Key to a positive meeting is a short discussion of the causal factors (scorecard) paired with a sharing of “New Information” to your retail customer. Be prepared with questions of a strategic nature for the executive members of the retailer’s team. Senior members of the retailers buying and merchandising departments spend their days with suppliers whose opinions they value. Join the group with unique category insights and a demonstrated passion for your category and the retailers overall business.