Ged King:
If you're a niche player, you better have a great story. Your product better do something incredibly better than everybody. Now, it could be an incredibly better price. That's not a great strategy. It should be an improvement that is really worthwhile for them to take the risk on you. So understanding the end user, and then how your niche item or a couple items improves upon their use case, that's the story at the end of the day. You've got to be able to tell it.
Mike Fowler:
Hey, retail fans. Welcome to Retail Oriented. I am your host Mike Fowler. I'm the VP of Retail Sales at Sales Factory. I love to talk to people and learn about this channel in my spare time. And that is where this podcast came from. So we're going to learn all kinds of really interesting things about the retail channel, whether it's online or in-store, all the distribution methods, all the different retailers. We may even learn some acronyms. It's going to be a lot of fun. To start us off, we've got a wonderful guest. Ged King is the CEO of Sales Factory. He is also a professor at Wake Forest. Go Deacs. Ged, welcome to the show.
Ged King:
Glad to be here, Mike. Thanks for having me.
Mike Fowler:
Yep. Thanks for being here. We're going to learn a lot. We're going to dive into our first episode, talking a lot about assortment, and understanding how consumers are making their decisions, how to get the right assortment at retail, and how to partner with your retailer to grow their business and your business. So Ged, with that little intro, let's jump right in. How do you start the process of making a decision on the right assortment for a retailer?
Ged King:
Well, my answer to probably every question today will be, talk to the end user, see what they care about. Because assortment planning, while it involves lots of things like inventory and margin and those things, it really is, it's important to understand what the end user needs and wants.
Mike Fowler:
And so how do you start that process? So if you're brand new to this, you're a manufacturer that's out there, you've never sold through the retail channels, how do you talk to end users? And how do you understand what's driving their decision when they walk through the door of a retailer?
Ged King:
Well, there's lots of ways. There's formal and informal ways. When I was growing up, my dad dragged me to stores my whole life, and I thought everybody went to True Value seven times a week. But it turns out we were doing work, and that was observing what was going on in the store. And that didn't cost any money, that just took time. My poor kids have done the same thing as they've grown up. And so that's a great way to start. Walk stores, and just see what's going on. You can look at inventory levels. You can look at what products are in stock at different retailers. You can see people selecting products. You can ask people in the aisle, the people that work in the stores, what do you think is the best product? You can learn a ton just from that. Beyond that, you can do actual formal qualitative research. And then my favorite is quantitative research, because you can get to actionable numbers.
Mike Fowler:
Yeah, that's really interesting stuff. We were talking off camera, before we got started, about store walks. I was dragging my son to retailers all weekend, shopping a particular category. Just trying to understand how is the experience in the store. A lot of times when I'm looking, I'm looking at things like price progression. Are there gaps? Is there need for innovation in a category? What are some of the things that we're seeing when we're doing store walks? And kind of proving things out, developing hypotheses in the qualitative phase.
Ged King:
So I think you can learn a lot about different brand strategies from looking at what they're doing, the product offering, features, benefits, what they're charging for those, what they're charging compared to the competitors. But there's a really important thing that we forget because we're so in the business, the end user generally doesn't know what things cost. Consumers, for sure DIYers, you buy a hammer once in your life, you don't really know what a hammer should cost. Pros a little less so, they know often because they're in the stores quite a bit. But still they don't really know like we know because we are working on the line the whole time. So there's lots of opportunities to get people to buy in different ways.
Mike Fowler:
I want to talk a little bit about a competitive analysis. So everybody kind of talks about competitive analysis, competitive landscape. People use different terms for it. But talk a little bit about that specifically as a manufacturer, your direct competitors in that same category, but also across retailers, and online, and how you have to approach a competitive analysis these days. Because it's way different than it used to be. It's not just the guy sitting next to you on the shelf. It's a much broader range with everybody walking in the stores with their phones.
Ged King:
Well, it's incredibly different. It's even changed in the last couple years. The pricing is done dynamically by market, sometimes by store. So you can't just go to one store and say, "Hey, I know what Home Depot is doing." You have to go to all the stores. So that's a challenge. Online is also dynamic. And it depends on you, where you are, your IP address, lots of other things. So you have to be cautious with that. The flip side is the tools are way better. We can see what's going on online. We can see what's going on with search. We can see volume. We can see price. We can even get pretty close to seeing margin online. So you take those tools, and you combine them with store walks that are across the country, you can start to see what's going on with your business as well as your competitors' businesses. And it's a great way to start. We get asked for market sizing a lot. It's the same idea rolled up into what's going on overall in a category.
Mike Fowler:
So kind of taking that big picture of a category in is really important when you're thinking about, "Okay, what do I develop for this particular retailer?" It's also important to keep in mind consumers are different from retailer to retailer, how they shop, all that kind of thing. So talk a little bit about how one assortment for one retailer may not fit another, whether that's a big box or a co-op or farm channel or whatever it is.
Ged King:
Well, I think the easiest way is to look at extremes. So take a big box like Lowe's and then take Walmart. Everybody shops both. But when you're in Walmart, you might be buying groceries with your family, if you're a pro, and you might pick up a tool just to fill in for something so you don't have to go to another store. Meanwhile, if you're a pro and you go to Lowe's, it's probably early in the morning, and you've got a plan, and you're buying what you need, and you're probably not with your family. So it really depends. You're going to have different assortments based on whatever the occasion is likely to be. And then when you get the DIYers, they're shopping everybody. So you have to have the assortment planned accordingly for them as well.
Mike Fowler:
They just behave so differently depending on what their mindset is, like everybody.
Ged King:
Yep, that's correct.
Mike Fowler:
Pros are consumers also. We always kind of talk about that, and that's really, really important to keep in mind as you're developing your assortment to get it right for them. What's their mindset? What are they looking for when they're in your retailer?
I want to talk a little bit about different manufacturers and how they approach the assortment deal. Cause we work with a lot of manufacturers from really big, broad lines, have a lot of stuff to pretty niche items. So if you're a really small manufacturer and you have some niche products, how do you approach a Lowe's or a Home Depot versus a really big manufacturer? How do they approach that desire to be in these retail channels?
Ged King:
If you're a niche player, you better have a great story. Your product better do something incredibly better than everybody. Now it could be an incredibly better price. That's not a great strategy. It should be an improvement that is really worthwhile for them to take the risk on you. So understanding the end user, and then how your niche item or a couple items improves upon their use case, that's the story at the end of the day. You've got to be able to tell it.
Mike Fowler:
Yeah. What about big guys? Big manufacturers, they got a ton of SKUs, a ton of items out there. I want to talk a little bit about a sacrifice strategy, and how do they get the right assortment, and develop a relationship with the retailer?
Ged King:
You used the word sacrifice and that's often a rare thing. And because we want all our products in every store. So it's really important that the retailer believes you are working for them. And when you're working for the retailer, and they know that, they're going to listen to you and they're going to work along with you. If you get a line review called on you because you're the incumbent and you have all the SKUs, it's probably because they don't believe in you anymore. And you're going to have a lot of work to get out of that hole.
So to me, you got to act like you work for whatever retailer that you're talking to. And not only act, but actually do it, and give them the right advice to build their business. By the way, we're in a weird comp environment right now. We've had incredible comps up until now. And even the comps earlier today from some of the retailers were surprisingly good. How long can we keep this up? So it's going to get tougher and tougher. So everybody's going to have to work together to make the businesses go.
Mike Fowler:
By the way, if you're listening to this at home, we're late August 2022. So that's kind of the timeframe that Ged's talking about in terms of comps.
And you said something really interesting regarding the long game and developing a relationship with a retailer. You have to act like you're going to do it, then you have to really do it. They have to believe and trust in you. So everything about choosing your assortment, and getting, developing consumer understandings that you're presenting to your retailer, and making sure that you're hitting all those right things, it's all about developing that relationship. It's about growing their business, which will in turn grow your business.
So if you're a manufacturer, the name of the game is how do we grow our businesses together? How do we develop that partnership? So really interesting stuff. Ged, thanks for coming on. While I have you in the hot seat, I'm not going to let you go so easily. I want to ask you a couple kind of rapid fire questions. I'm going to just fire off a couple. You just say the first thing that comes to your mind.
Ged King:
All right.
Mike Fowler:
All right? All right. Here we go. First one is, what's your strategy for navigating big box when you are the shopper? So when you're a shopper in the store.
Ged King:
That's a tough one, Mike, because I spend so much time observing in stores. And so even if I go to a store for a project on a weekend, I usually have family in tow and we're usually doing a store walk simultaneously. And so usually I walk the categories that I love, and that I'm working in, and then eventually I get to my to-do list. That usually costs me money because as I'm walking these other categories I'm like, "Oh that looks cool. I might buy that." And so again, back to my poor family, they got to do this. So going to a Home Depot or Lowe's takes a long time.
Mike Fowler:
Yeah. Yeah. They better bring some water. Yeah, totally understand that. It has oftentimes cost me money walking stores with my family, and then at the end of the time I walk out of there and I forget what I actually came for. So that's happened to me a bunch too.
Ged King:
Right. And it's also hard-
Mike Fowler:
End up walking back in.
Ged King:
It's hard on a good, better, best selection because I'm analyzing what are they trying to cause me to do. Right?
Mike Fowler:
Right. All right, one more question. What's a jingle that stuck in your head from childhood?
Ged King:
I've heard about this question before, Mike, and so one because my dad could sing and he sang it all the time, was the Gerber Jenny Rebecca song. And the reason I remember it is my sister was named after the song.
Mike Fowler:
Nice.
Ged King:
So I love that one.
Mike Fowler:
That's awesome. That hits close to home. All right, if you could give any piece of advice to somebody that's trying to break into retail, they're a manufacturer, trying to figure out their assortment and get into retail, that one piece of advice?
Ged King:
Oh, one of my favorite experiences, it was at Home Depot, is I walked in the room and the merchant said, "Oh, Ged King's here. We're going to learn about the consumer today." And I think he was making fun of me. He turned out to be an executive, so it worked out. But, to me,, that's the game plan. Understand the end user, come in and help them while you're helping the retailer and that's it. So I don't think you can ever lose going that way. It may take a little longer, but you'll get there.
Mike Fowler:
And follow the process. Understanding that that consumer is step one in the process. Ged, thanks a lot for being here. We appreciate you coming on the podcast. I'm sure we're going to ask you to come on again sometime in the future, so get ready for that call.
Ged King:
I appreciate it, Mike. Thanks for having me.
Mike Fowler:
Yeah. Thanks everybody for tuning in. We're going to be covering a ton of retail topics, everything from acronyms to assortment, distribution. We're going to have a ton of guests on, but we always want to hear from you. So if you've got a guest or a topic that you want us to cover, please reach out to us. Go on our website salesfactory.com and submit a form there. Or you can email me directly, mike.fowler@salesfactory.com. We would love to hear from you guys and we want to hear what you want to hear about. So with that, thanks everybody for joining us. And remember in retail, it's all about selling in and selling through.