How to Become a Buyer's Favourite Vendor

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Understanding the buyer perspective is critical to the success of our clients; however the buyer’s side of the equation has received minimal attention – nobody has officially asked buyers what they want. Our goal is to change that.
There is an incredible amount of client-side investment in programs based on assumptions with too many guesses being made on such a fundamental cog in a client’s business. Further, most of the relevant data being utilized was either dated or focused on the U.S. Marketplace
The following study was conducted with McWhirter & Associates to commission a proprietary Canadian focused research study with Retail Buyers of CPB and OTC products.
For a full version of the report please contact us.

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How to Become a Buyer's Favourite Vendor

  1. 1. Executive Summary - Retail Buyer StudyHow to Become a Buyer’s Favourite VendorPresented By: Armstrong PartnershipResearch By: McWhirter & Associates
  2. 2. Why Conduct a Retail Buyer Study? y y y• Understanding shopper marketing is critical to the success  of our clients; however the buyer’s side of the equation has  received minimal attention – nobody has officially asked  buyers what they want buyers what they want• There is an incredible amount of client‐side investment in  programs based on assumptions with too many guesses  being made on such a fundamental cog in a client’s business• Further, most of the relevant data being utilized was either  dated or focused on the U.S. Marketplace• The study was conducted with McWhirter & Associates to The study was conducted with McWhirter & Associates to  commission a proprietary Canadian focused research study  with Retail Buyers of CPG and OTC products• The following slides are a summary of the full more detailed  presentation
  3. 3. Study Background
  4. 4. Retail Buyers Surveyed y y• Work for a range of retail chains, with sizes ranging from 3 or 4 locations up  to chains with more than 350 locations• Buy for an average of 118 stores• Two‐thirds of the Buyers interviewed buy products in both CPG and OTC  categories.. On average, they personally purchase products from 5 categories On average, they personally purchase products from 5 categories Packaged Goods 60% Beverages 58% OTC medications 52% Cosmetics, health and beauty 50% Confectionary y 44% 0% 10% 20% 30% 40% 50% 60% 70%
  5. 5. Executive Summary
  6. 6. Best & Worst Vendors• “Best” vendors are set apart based on the service they provide – To some extent this traces to the personality of the vendor reps, but beyond  that it is linked to a feeling that the vendor is providing helpful suggestions to  the retailer to improve their business• The “Worst” vendors are also identified based on (poor) service  – Thi i li k d t This is linked to personality issues, poor communication, delivery concerns lit i i ti d li
  7. 7. Optimizing Vendor Presentations p g• Retail Buyers offer a number of suggestions to Vendors who are preparing a  presentation: – Focus on products that “fit” with the Buyer’s retail strategy • Explain how the product will grow my business – Bring more data on pricing and profitability numbers • Explain profit margin availability – Bring the product itself, not a picture Bring the product itself, not a picture • Focus on the products, not the company or employees – Come prepared • F Forecasts, trends, consumer insights, marketing and ad plans t t d i i ht k ti d d l
  8. 8. Other Opportunities for Vendors pp• On average, Buyers rate their vendors’ understanding of their business strategy  to be only a 7.8 out of 10: – This clearly indicates an opportunity for vendors to become better This clearly indicates an opportunity for vendors to become better  informed in this area and to tailor their presentations to highlight their  understanding of the retailer’s business• Buyers’ advice for vendors competing with private label products is to: – Maintain an attractive price point – Differentiate on quality, brand name, varieties, packaging, format, size or  other variables – Support the brand through advertising and promotions
  9. 9. Retail Buyer Attitudes y• Price is the #1 concern Buyers have when assessing a vendor presentation: – Their highest agreement (94%) is to the statement that the retail Their highest agreement (94%) is to the statement  that the retail  environment is becoming increasingly cost competitive• g p y g y g( p A substantial group of retail buyers agree that they are seeing (or expect to  see more) changes in the retail environment driven by innovation and  technology: – Increased importance of at shelf visual dynamic displays (87%); Increased importance of at‐shelf visual dynamic displays (87%);  Innovative product design (83%); and Innovative package design (75%) – More third‐party merchandising teams (65%) – More prominent usage of Smart phone QR codes in the next 6 months  (62%) – Shoppers will increasingly use their Smart phones to access product  information while they shop by 2012 (56% agree)
  10. 10. Thinking Forward to 2012 g• Retail Buyers are clearly aware that economic and competitive factors will  impact the retail environment over the coming year – On the competitive front retailers face greater competition from mass On the competitive front, retailers face greater competition from mass  merchandisers / discount / dollar stores • Target, Walmart and Costco were each identified by name – Economically, the costs of goods is increasing, as are operation and Economically, the costs of goods is increasing, as are operation and  transportation costs• Most buyers surveyed are not overly concerned (yet) about Target’s entry into  Canada – Those from Ontario most often express strong concern  • This is consistent with (May 2011) news reports that 45 of the first 105  Canadian Target stores will be located in Ontario
  11. 11. TO RECEIVE A COPY OF THE FULL REPORT CONTACT: JOHN ARMSTRONGjohn@armstrongpartnership.com416.444.3050 x 229

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