How Wholesalers Can Save Brick-and-Mortar
Despite the pervasiveness of online shopping, brick-and-mortar stores still hold a significant portion of the retail dollar. During the first quarter of 2017, online sales accounted for just 8.5 percent of sales out of the $22 trillion global retail market. Yet, the percentage of online sales is growing, as online sales were 5.1 percent five years ago. This may be a shift that shoppers aren't ready to embrace. A Pew survey found that 65 percent of online shoppers would prefer to buy from physical stores if given a choice.
This trend is why wholesalers are eager to support retail stores to help them to maintain the significant market share they still hold.
Because of the market insights they've gathered through their own product development, wholesalers are in a unique position to help retail stores build lifetime relationships with their customers. In addition to the irresistible urge to see, feel and touch the products they’re buying, wholesalers know that consumers want more than a transaction — they want an experience. With beautiful packaging, marketing insights, storytelling, and cultivating online and offline relationships, wholesalers can help retailers build a connection between buyers and their products. These are tactile experiences that a touchscreen and a virtual cart will never be able to achieve — even with the promise of free shipping.
The Only One of its Kind
While one key advantage is for wholesalers to pass on price breaks to stores, there are far more significant ways that wholesalers can support retailers. In addition to the instant gratification of walking out with the product immediately, stores can meet consumer demand for one-of-a-kind products. When consumers enter a store, they’re looking for more than a mass-produced, one-in-a-million product that can be dropped off on any doorstep. Targeting consumers with exclusive and distinctive products can help retailers generate more traffic and ultimately higher profits. As noted in Deloitte’s Retail Distribution Outlook, “product uniqueness can beat price, promotion and placement.”
What’s on the Box
Wholesalers can offer packaging options that artfully incorporate with the store’s existing display hardware space configurations, while also allowing the product’s beauty and functionality to shine. By highlighting a product’s inherent aesthetics, packaging can be created to easily let consumers see the functionality and uniqueness of the product by leveraging its beauty.
Packaging is also a great place to tell a story. As consumers are becoming more interested in the “how, what, when and why” behind the product they're purchasing, graphics and images are becoming an important part of storytelling. Whether it’s a label indicating that the product is made exclusively in the U.S. or an infographic about all-natural materials and labor used in manufacturing, consumers are curious about how they're spending their money on a greater good. Packaging can also be used to shine a spotlight on the particular artisan who created and developed the product.
Informed Decisions for Brick-and-Mortar
A study found that 81 percent of consumers research products online before they even step foot into a brick-and-mortar store to purchase. Wholesalers can use their own websites to create a connection between the consumer and the product online, with retail locations listed by ZIP code, encouraging browsers to head to the store for instant gratification.
Through the investment they've made in curating and developing product offerings, wholesalers have insights on customer preferences, market trends and buying habits, which they're more than willing to share with retailers. For example, Four Seasons Produce emails market news to its stores each week, which “provide specific information on threats and opportunities for conventional and organic produce.”
Merchandising Insights
In an environment where consumer tastes are constantly evolving, wholesalers are helping retail stores develop a proactive response to buying decisions, pricing strategy, promotions, in-store display and merchandising. Ongoing product education keeps stores informed about differentiation points that make their products unique — i.e., information that can be used on the store floor to help answer customers’ questions and help sales staff answer product questions. Wholesalers can also use these insights to make buying a product more fun. Excel Bottling Company created Darkest Hour Black Cherry soda exclusively for stores in its distribution network in Missouri and Oklahoma, which were right along the path of totality during the 2017 solar eclipse.
Online Relationships
In addition to their product websites, wholesalers can use their social media channels to drive customers into retail stores. Eighty-one percent of consumers make purchase decisions based on friends’ social media posts. Instagram can carry the product’s story in images and support stores by tagging their locations in posts, photos and mentioning specific retailers in the comments.
Letterfolk encourages its customers to post images of the stories they've created with their letterboards on its Instagram feed. Bonobos also use its customers as models, as it posts images of them wearing the brand's clothes in a variety of settings.
Wholesalers can also support retailers by filming and snapping photos of retail stores that sell their product whenever they see an advertisement or storefront, and then funnel consumers to go to specific retail stores by ZIP code.
The future looks bright for retailers, but they will need support. Wholesalers who are willing to support stores can use their packaging, online engagement and market knowledge to help stores become smarter and more proactive as they face the dynamic landscape of online competition. This will ensure that for retail, wholesalers will have value that extends beyond the supply chain.
Vitali Servutas is the CEO of WÜD Life, an online retailer and wholesaler of real wood and rock phone cases.
