The Segmented Retail Channel (SRC) sector represents significant growth opportunities for retailers and manufacturers alike. Studies have noted that the only retail channels expected to grow at a rate faster than the GDP will be those in the Segmented Retail Channel sector.
Manufacturers who fail to leverage the growth opportunities of this sector will find themselves becoming more controlled by the dominant retailers in the traditional retail channels. These same manufacturers will find themselves being hindered in not being able to market to specific demographic groups that are served primarily by the SRC sector.
Although retailers in this channel will continue to experience growth in their category, their own growth will not be maximized unless they leverage the full power of the resources available through dedicated sales marketing agencies.
Highlights of the white paper include:
- Today, the retailers that are in the Segmented Retail Channel represent significant volume. More importantly, SRC retailers are in a much better position to grow their markets long-term than retailers in the traditional retail channel.
- For retailers in the Segmented Retail Channel, the service they receive from the manufacturing community is often provided as an afterthought because of their focus on high-volume traditional retailers.
- An appallingly low rate of the supply-chain community even visited SRC stores.
- One of the legacy processes that work against the SRC is how manufacturers represent themselves to retailers.
- Based on Wal-Mart’s success, the retail industry in general has created another issue in their quest to improve their bottom-line.
- This can only mean that smaller retailers will be served by people not viewed as the best by their respective employer.
- Additionally, the consumers in this channel have a lifestyle that dictates different shopping patterns and, ultimately, their market basket. It has been the SRC’s ability to satisfy these needs that has enabled it to achieve its on-going pattern of yearly growth exceeding traditional retail.
- To achieve this, manufacturers and retailers need to have access to people who have not just sales and marketing experience, but also operational and supply-chain expertise.
- The push to optimize supply-chain efficiencies is what causes these legacy processes to breakdown in the SRC. At the same time, the SRC has developed highly sophisticated retail formats designed to optimally serve their consumers.
- SRC retailers use the private-label strategy very successfully and, in doing so, have created a level of consumer loyalty that many non-SRC retailers can only achieve through extensive, long-running marketing programs.
- In our review of the industry, this is one of the largest issues that both retailers and manufacturers choose to disavow.
- A key obstacle to one retailer in this segment may very well be a benefit to another.
- It becomes impossible to disregard the conclusions. In fact, it would not be fiscally prudent to disregard the findings and avoid actively working to find a solution. The financial rewards are too significant to the manufacturing community and SRC retailers to ignore.
- The solution to these problems requires taking elements of various “best-practices” and combining them together into what we will refer to as “best-practice hybrid” solutions.
- The ability to have dedicated resources that are focused 100% on the SRC sector is imperative.
- Because of the perception of the SRC sector among manufacturers, it is difficult for a retailer to obtain any expertise from manufacturers that will give them a competitive advantage.
- This issue dictates the sales team working with SRC retailers to be not only experts in product development, but also in sourcing of raw materials, packaging design, and all of the financial intricacies of manufacturing and retailing.
- In the SRC segment, the role of the dedicated broker is to serve as the collaboration expert working with the retailer to define the specific needs of the consumer and to develop the product with a selected manufacturer.
- To achieve both of these simultaneously requires a high degree of objectivity in being able to view the marketplace and determine the optimal solution.
- The Segmented Retail Channel sector represents significant growth opportunities for retailers and manufacturers alike.
If you would like to read the white paper in its entirety, please visit The Value of Specialized Sales Professionals.
Mark Hunter, The Sales Hunter, is author of “High-Profit Selling: Win the Sale Without Compromising on Price.” He is a consultative selling expert committed to helping individuals and companies identify better prospects and close more profitable sales. To get a free weekly sales tip, visit www.TheSalesHunter.com. Read the first chapter of his instant-classic “High-Profit Selling” here.
Copyright MMX. Reprint of this article is permitted if the above paragraph is included.