Everything you should know about your potential partner retailer’s business and how to get the information you need.
There are many reasons why it makes sense to conquer a market through reliable retail partners. Besides the shared risk, lower investment and faster growth, you may want to benefit from your partner retailer’s deeper understanding of the market – the local players, dynamics (e.g. real estate and channel development) and consumer behaviours – before opening your own retail stores.
Even if you have no intention of buying back the partner’s business after a couple of years – you may still want to understand how your partner’s business can affect your company’s USP (unique selling proposition). Having access to reliable information will help you to find the optimum balance between standardisation and customisation of your retail format, your product and even your brand perception.
With brick & mortar retailers desperately looking for ideas, actions and tools to help fight double-digit footfall drops, increasing competition from outlet concepts and ever intensifying online competition, there is no better timing than right now to convince your retail partner(s) that sharing data and information is crucial to winning that battle.
Before sharing a few proven solutions for getting your partners to cooperate, let’s have a brief look at partner retail transparency.
Top 3 Ingredients of Partner Retail Transparency
- Daily sell-through data (on POS-, transaction and SKU- level) and daily footfall (per POS): Getting those data delivers all ingredients necessary for optimal visibility on any retail KPI. It allows you to benchmark your own retail against your partner’s retail and your partner retail against market dynamics. It facilitates best-seller-management and in-season replenishment. And it helps to push your partner to spend open-to-buy budgets on products that sell, rather than products he or his buyer fancy.
- A monthly store P&L (profit and loss statement) for each of the stores operated by your retail partner and a consolidated version for comp and non-comp stores: A minimum structure provides net ticket sales, mark-downs, cost of goods sold (CoGs) and the corresponding gross margin. Even better, but only realistic to expect if contractually stipulated, is a full flash P&L. This would add details on operating expenses (rent, staff cost), marketing spend and depreciations. Keeping track of store performance, benchmarking it against the original business case, and agreeing on actions at an early stage are the benefits for you and your retail partner.
- A pre-defined set of pictures of the store, which allow you to control execution of window presentation and visual merchandising. Using them as visual verification of noticeably differing sell-through numbers helps to prevent faulty conclusions. Tracking performance of your trade marketing activities will as well require visual evidence.
Six Proven Ways to Gain Better Transparency in Partner Retail
So how to get the information you need despite potential resistance and arguments from your sales force and the partners themselves?
- Nowadays no retailer can afford to ignore a multichannel approach. Exclusion from this would leave the partner retailer out of key sales and footfall drivers, such as inventory information for consumers looking for the latest product release. To benefit from this click & reserve service, your partners will need to provide their sales and inventory figures.
- Your partner wants to benefit from never-out-of-stock products or in-season replenishment of bestselling items? Make it an exclusive offer only to partners who provide their sell-through data in return.
- Even if discussed and rejected many times, with any new negotiation attempt you can make data transparency a precondition (for additional mark-down support, returns acceptance or fixture contributions and so on).
- Make the partner’s life easier by providing tools that facilitate data sharing and reduce the time and effort required to provide data. We are, after all, talking about data the partner needs and has anyway in order to managing their business. Here a few examples: footfall counters feeding numbers into the POS-system; easy to handle and intuitive business intelligence systems like BOARD or QlikView with automated KPI reports, shared folders and calendars; customer feedback tools like Kampyle or UserVoice; and a web based PDM/PLM tool (like Lectra Fashion or JUSTmes). These tools also offer community and partner modules, which allow easy and structured integration of partner feedback.
- Offer the partner business insights in return to allow them to benchmark their business against other partners’ businesses and against your own retail stores.
- Finally, the easiest and least costly version: find a good and willing partner to pilot EDI and other data exchange. Prove that the partner’s sell-through and gross margin is substantially increasing. Use the partner retailer as an ambassador for the idea! You will be surprised how many partners suddenly become very keen on joining the club.
Partner retail transparency may take some time to convince retail partners and will need a clear and detailed stipulation in the partner retail agreement. But if you and your employees value information and feedback from your retail partners and use it to improve both the partner’s business performance and yours, this is an open goal for a truly valuable long-term relationship.
About the Author
Heike Blank has worked for big organisations such as VF Europe and s.Oliver but also for niche brands such as Ecko Unltd. and Zoo York. Her extensive experience with opening and managing own retail, partner stores, concessions and shop-in-shop in 23 countries in Europe, the Middle East and Asia make her an expert in retail portfolio management and expansion. Get in touch with her via e-mail or read more from her here.