Brand retailer symbiosis – the importance of strategic partnerships

Small independent retailers serve as incubators for new innovative products.  Larger retailers tend to overlook small brands or make it hard for small brands to gain distribution in their stores.  It’s fair to say that brands and retailers need each other to survive.

Consider this.  Retailers really don’t make anything, they sell other people’s brands. They sell real-estate in the form of shelf space.  Retailers earn their income by maximizing the sales from the items they place on their shelves.  The only way they can survive is by having the right assortment of products their shoppers want to purchase and then keep those shoppers, and new shoppers, coming back again and again.

This important distinction is overlooked by most retailers.  A brand should never be viewed as an ATM machine.  They play an important role in helping the retailer survive and keep their doors open.  Conversely, brands need to help the retailers drive sales and shopper traffic in their stores.  It’s this symbiotic partnership that needs to be nurtured and supported by both the brand and the retailer.  One can’t exist without the other – this includes online retailers.

It is a huge mistake for any retailer to turn their back on a brand when they gain distribution at a competitor.  It is also a huge mistake for large retailers to overlook local and innovative small brands.  Retailers should make it easier for small and local brands to gain distribution and sell products in their stores. This is typically not the case.  These small innovative natural brands are responsible for most of the category growth at every retailer. Some big brands are able to avoid many of the expenses passed on to small brands.  The focus of these articles is on leveling the playing field.

Independent, local, and natural retailers are the lifeblood of the communities they serve. Their importance cannot be overemphasized.  Their contribution to the local economy is frequently overlooked. They traditionally have a strong commitment to their community, local schools and causes, sustainability, and educating their loyal customers about new and innovative brands specifically designed to meet their needs. They need to work closely with the brands they sell to satisfy their shoppers.

Independent retailers should aim to strike a healthy balance between popular natural brands and the unique specialty items that differentiate the retailer from their competition. Natural retailers should also stock a good selection of the top-selling brands also sold by their competition along with the unique niche or specialty items their customers expect them to carry. With this strategy, new customers will find their favorite brands, existing customers will have a broader selection to choose from and the retailer can compete head-to-head with large retailers while still satisfying their core customer base.

Dan’s mission is “Empowering Brands and Raising The Bar”.  His weekly newsletter, educational podcast and training courses have become an invaluable resource for brands and retailers seeking a competitive advantage.  To learn more or connect with Dan, visit BrandSecretsandStrategies.com or email dan@cms4cpg.com.

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By |2018-10-03T12:59:09+00:00October 1st, 2018|Category Leadership|

About the Author:

Daniel Lohman, CPSA is Strategic Advisor in the CPG and Organic Industry. His company, Category Management Solutions (CMS4CPG LLC), provides innovative ideas, actionable insights and strategic solutions for companies interested in gaining a significant competitive advantage. He assists companies in expanding their retail distribution and improving their merchandising. His extensive knowledge and expertise reaches far beyond traditional category management and has earned him recognition throughout the industry as an expert, speaker, trainer and thought leader. Daniel can be reached at Dan@CMS4CPG.com. Connect with me on LinkedIn.

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