The current challenges manufacturers are facing is a good reminder of the importance of diversity in your portfolio of online retail partners—though maybe not for the reason you might think.
It’s business 101 that relying too heavily on any one partner, even if that’s the biggest retailer out there, isn’t a healthy approach. If something happens to that business, the implications to your business can be irrecoverable if you don’t have something to fall back on.
But another reason diversity is so critical is that each retailer is different, and each plays a different role in supporting your business. No one retailer will be everything you need in a partner, but collectively, the group of partners you work with should be.
For example: Some brands are better at promoting brand names or reaching an ideal niche customer base. Others are experts at driving sheer volume or providing an A+ customer experience. Each retailer has its core competencies, and finding the right mix for your business will help you maximize market share across your portfolio.
Make Sure You Work with a Diverse Mix of Online Retail Partners
The unpredictable retail environment has shined a spotlight on the importance of diversification in manufacturers’ retail partnerships as a way of maintaining or gaining market share. Paired with consistency on ecommerce fundamentals, manufacturers with a robust portfolio have had more options for weathering a market slowdown.
So, how does your partner list stack up? Compare it to these seven criteria to make sure you have at least one significant retail partner playing each role.
1. The retailer with superior logistic capabilities.
Customers shopping online don’t just shop for an item itself—they shop for how quickly they can receive it. An important element of your partner list is including retailers that can operationally support speedy delivery, like Wayfair’s Castlegate or Amazon’s FBA programs. Working with a retailer who can get products delivered quickly ensures you can capture the customer for whom lead time is of utmost importance.
2. The retailer with a robust customer review program.
Customer feedback plays such a huge role in helping the online customer make a purchase decision. That makes it important to not only work with retailers who have a process for garnering organic customer reviews, but also those that can help you stack them up in an authentic way. Some retailers have programs that recruit real customers to try and review your products to help build out your product page for that item. A handful of real reviews can make a big difference in pushing an item to the top of your bestseller list.
Some retailers have programs to help brands stack up authentic reviews on bestselling products.
3. The retailer that can be agile during disruption.
In ecommerce, you want to avoid going out of stock at all costs. But for the times when its unavoidable, you want to have a retailer who can work with you during the disruption. Some retailers take product offline as soon as stock hits zero—which, obviously, will hinder any opportunity for sales. But others will take backorders, allowing sales to still come through for the customer who doesn’t mind waiting. By having retailers in your partner list who have some flexibility around handling stock outages, you have a bit of insurance against inventory volatility and making sure you don’t completely paralyze your online business in that event.
4. The retailer that can help tell your brand story.
The narrative behind your brand helps make connections to the end customer. Maybe you have a story about your brand’s sustainability efforts, or impeccable production quality, or its roots in notable design. No matter what the story is, you’ll want to have partners who can help you communicate it to the end customer and help them learn what your brand is about. This is often more achievable with smaller or specialty retailers, who by nature can put more emphasis on the brand through marketing campaigns or their website and help build greater brand affinity within a customer category.
Smaller or specialty retailers can often put more emphasis on your brand story through marketing campaigns or their website.
5. The retailer with a collaborative buying team.
Another factor that can vary widely by retailer is the amount of human interaction you can get with the buying team. Smaller or specialty retailers may enable a closer buyer relationship, which then lets you collaborate with them to find strategies that work for your brand. This also often means they can be nimbler around everything from promotions to assortments to marketing, rather than being confined to templated programs. These are the buyers you can work more closely with to test and try things to drive sales.
6. The retailer with a strong trade program.
Trade programs are nothing new for retail, but some retailers have the “pro” segment at the forefront of their strategy. They continue to dial up their marketing to this audience, from adding perks and benefits to members-only programs to partnering with designers on content or even product. Working with a retailer who has a solid reputation with the professional customer means more opportunity to reach this coveted repeat buyer through various ways.
7. The retailer with the simple price change process.
The complexity of updating pricing can vary widely retailer from retailer, some with extended timelines or lengthy processes to do so. Having retail partners who accept price changes as they arise and have a speedy and straightforward process will help get updated pricing to market faster and keep your ecommerce channel from becoming the wild west of pricing for your products.
Working with different types of retailers who bring varying benefits and capabilities to the table is what makes a strong portfolio. Every retail partner that manufacturers work with will be different—that’s part of the beauty of it.
By diversifying your partnerships, even outside of how you’ve operated historically, you’ll be better set up for any curveballs that come your way.
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