Dave Geren:
Anytime that you can show a merchant that you have some momentum, and online is probably the easiest way to do that, is getting that placement, getting some eyeballs, getting ratings or reviews, getting some sales, and then you have the ability to really position yourself to say to that merchant, "You don't want to miss out. This is an up and coming brand. This is an opportunity for you to gain sales."
Mike Fowler:
Welcome back to Retail Oriented, Retail fans. This is the show where we talk about all things retail. I am your host Mike Fowler. Today, we're going to jump right in because we've got a really special guest with us Tennessee Vol and President of the Sales Factory, Dave Geren. Dave, welcome to the show.
Dave Geren:
Thank you. Go Vols.
Mike Fowler:
Yeah. I had to mention that because the Tennessee Vols football team is playing some serious football right now, and if you don't know what time this is or when you're watching this episode, they may have just beat Alabama. I'm an Auburn guy from my family, so I always love it when anybody beats Alabama, so we are together.
Dave Geren:
We're aligned.
Mike Fowler:
That's a good thing.
Dave Geren:
We're aligned on that.
Mike Fowler:
But that's enough football. We're going to try to keep him on task today to talk a little bit about PLR. So Dave, can you start off just for folks that may be new to retail or new to this channel? What is a PLR?
Dave Geren:
Yeah. So PLR or product line review. So basically it's when a merchant at a retailer is going to make some decisions about the product line that they carry, so whether it's going to be the items that are going to be on the shelf or online to how they're going to price. There's a lot of different things that go into a PLR, but at the end of the day, it's a high stakes game. This is a time when a retailer can make some big changes that can really change their business for the better or for the worse. It has incredible impact to the vendors because the vendors can stand to gain or lose quite a bit, so it's high stakes poker for the retail world.
Mike Fowler:
And talk a little bit about who's involved in a PLR.
Dave Geren:
Sure.
Mike Fowler:
We've got incumbents, and then we've got people that are trying to get into the store, so talk a little bit about what does it mean to everybody that's playing game.
Dave Geren:
Yeah. So for incumbent vendors, so the people that are already on the shelf or are online, a lot of risk there because they have existing business that's foundational for them and their overall business, so they stand to lose quite a bit potentially. They also can stand to gain if they want to get more. You also will have some of the fringe players, you'll have some folks that maybe just have a few items in the lineup that are looking to get more. And then you have people that aren't on the shelf at all and it creates an opportunity for them to get on the shelf, even if it's just for a test just to get a trial, so this is a window of opportunity for every player in there.
And then on the retailer side, it's typically going to be, depending on the category and how important that category is, you're going to have visibility to potentially the highest up ranks in the retailers merchandising organization. So sometimes you'll have the GMMs or the senior merchants or MVPs, you'll have all those folks that could be involved depending on the category, and then they'll have other folks along for the ride a lot. You'll have everybody from the logistics folks to the marketing folks involved in the discussion as well.
Mike Fowler:
So pretty high stakes, as you said. Certain categories, there's a lot of dollars on the line-
Dave Geren:
For sure.
Mike Fowler:
... and a lot of important people making those decisions, so everybody's going to be ready to play. It's a big stage.
Dave Geren:
For sure.
Mike Fowler:
It's like a big football game. You've got to come and bring it, and be ready to play. So what's one of the biggest challenges for people that are not incumbents and trying to break into the retail channel? What's the biggest challenge to get invited to a PLR?
Dave Geren:
Right. Well, you said it, getting that invitation. PLRs are most of the time invitation only. It's not an open call, so getting on the radar screen of that merchant to get the invite so that you are asked to participate and get a chance at the plate, so that's probably challenge number one. Some of that can be handled through just your brand and being a recognized brand, and something that customers of the retailer are going to be asking for, so that becomes top of mind if you're not already on the shelf. If you're a new player to the game and you're a relative unknown, then it's about leveraging relationships and getting in front of that merchant any way anyhow, so if there's personal relationships that you can leverage to get in communication, if it's a third person removed, a friend of a friend of a friend that could suggest even a cup of coffee that you can go and have a conversation.
So just things like that, that are just normal networking things to other things that are a little more outlandish. I mean, we've done things like we've put billboards on the exits coming off of Paces Ferry or Exit 33 heading to Lowe's, that we've put billboards up so that they see it. We geo fenced offices with digital ads so that they begin to get familiar with the brand. We've done some things, we've done mailers, and we've done all kinds of things just to try to get the attention, and usually working in concert with other ideas and tactics so that we can just get noticed.
Mike Fowler:
Yeah. It's like there is a full orchestrated plan to getting that invite. Some of the more are outlandish things in wild and crazy things to get attention, but there's some other things too. Talk a little bit about building up your online sales and your sales and other channels to get that notice.
Dave Geren:
Yeah. No, for sure. So a lot of times getting online with your offering is way easier, so whether that be if you are doing a direct to consumer through your own channels. Amazon is obviously a great way to get eyeballs and get ratings and reviews, and things like that where you can start to get a little bit of momentum. And so anytime that you can show a merchant that you have some momentum and online is probably the easiest way to do that, is getting that placement, getting some eyeballs, getting ratings and reviews, getting some sales, and then you have the ability to really position yourself to say to that merchant, "You don't want to miss out. This is an up and coming brand. This is an opportunity for you to gain sales." Like I said, even for a test, it's a great way that you can get in front of them and show, "Check out this product, how much volume it's doing on Amazon," as an example, "and check out the ratings and reviews, and your customers are going to want this."
Mike Fowler:
Yeah. I'll age myself a little bit here, but I remember starting off in PLRs, and getting into the big box, brick and mortar retailers. Amazon was viewed a little bit as a deterrent or the other guy as the competition, and now it's almost foundational. You need to have that piece in place and be performing well there to get the in-store placement, so it's turned now, the retailers at brick and mortar are recognizing that as, "Hey, this is a proving ground for some of these brands."
Dave Geren:
There was definitely a time where, depending on the merchant, some merchants would be upset with you if you were on Amazon especially if you had alike item, item for item. Sometimes they wanted to talk about Amazon, so you had to do a little homework figure out where that merchant stood. Nowadays, I think most merchants are looking at it and saying, this is part of the customer journey. There's a lot of people that are going to go online whether they're normal Google search, but also end up on Amazon checking out products, but then we'll end up in their stores.
So I think there's been a bit of a reckoning and a reconciliation of, "Okay, it's going to happen, so we want to make sure that the experience holds up whether it be what's happening on Amazon needs to get fulfilled in my store," that's a win. But like I said, there was a lot of conflicting things of showrooming and all that stuff that was happening, so I think the retailers have really started to get their head around, "Okay, this Amazon thing's here to stay, so how do we best leverage it, and how do we make it work for us?" Because you still have an inordinate amount of sales that happen in the store as big, as sales on Amazon have gotten, depending on the category, you're still 90% in store in a lot of cases.
Mike Fowler:
Yeah. So we've talked about getting the invite to a PLR, and I think everybody tends to think about those traditional product categories that are already there and established in brick and mortar retailers, but some of the ways that people are getting invited to PLRs and getting invited to participate in meetings for space in the store is through innovation and new categories. We're seeing a lot of changes in the store where they're offering new things that weren't there 10 years ago or 15 years ago, and so talk a little bit about some of the ones that you've seen that have broken through and you've noticed maybe that, they have been like, "Wow, that's innovative, that's new."
Dave Geren:
Yeah. And innovation isn't always a technology play. I mean, you had a lot of the innovation of Ring Doorbells and Nest and things like that, that were coming in and providing new ways to do things that were connected to home improvement in some way. But it's not always that stuff. I mean, think there's also innovation in thinking about categories and things that the customers that are walking the aisles there could want. I can recall at Lowe's, there was a big debate when I was there over putting candy in the checkout aisle, and there was a massive debate over that, candy and sodas, and waters and all that stuff, and it became a pretty easy call because it's just an add-on sale. Or paper products and paper towels and things like that, so there's things like that, that aren't that necessarily innovative, but they do create opportunities to get add-on sales.
And lately, you've started to see more things, clothing and different things like that. Some of those things are a stretch and you wonder if they'll last, but I think what we're going to see now, and honestly I believe over the next year, there's going to be a big push to get ticket adders and things because we're going to start lapping all these price increases. Traffic is going to be down, and so the benefit you had in 2020 of everybody's at home, so you had increased traffic and then you had double digit price increases. And then in 21 you still had double digit price increases, but traffic was starting to fall. Well, now here we are, you don't have either. The traffic's going to be down and you can't take prices up anymore because inflation is starting to mitigate. It's going to create more opportunities for folks because what will happen is the retailers and the merchants are going to be looking for ways to comp the comp.
They're going to be looking for ways to, how can I get some add-on sales? How can I get some things to bolster the ticket? Because we're going to be in an environment where the numbers are going to be dropping, so it's going to create opportunity for a lot of people. So I would say even if you're a category that maybe has not traditionally been there on the home improvement side or a category that you maybe even been fighting for more space for years, if you can show that you're a reason for a customer to come there that wouldn't normally come there or an easy add-on, I think you're going to have a very compelling story.
Mike Fowler:
Yeah. I think that's a wonderful story to tell because even before the past few years and pre pandemic, there was massive competition amongst these retailers. Everybody's looking for that one little sliver of an edge up or a toehold to get the leg up on the competition. Now, it's exacerbated. It is to a really high extent where merchants are really looking for something that's going to add to their program because it's difficult.
Dave Geren:
And I think you've got to think about innovation beyond just the product. I mean, if you can have a service offering, a pricing innovation, things like that can also stand out and be a way that they can differentiate and win.
Mike Fowler:
Yeah. Really good stuff. While we have you in the chair, I never let any of my guests go without a couple of rapid fire questions. So I'm going to ask you a couple of questions. First thing that pops into your head, just go with it.
Dave Geren:
That's dangerous, okay.
Mike Fowler:
Yeah. All right, are you ready? Here we go.
Dave Geren:
I'm ready?
Mike Fowler:
What's the best and worst purchase you've made lately?
Dave Geren:
Let's see. The best and worst... Well, it might be the same thing. I bought some new golf clubs, and it made me feel really good, but I am still terrible at golf, so maybe the clubs weren't the problem.
Mike Fowler:
Maybe not. It tends to happen that way. The equipment may not-
Dave Geren:
That's right.
Mike Fowler:
... always be with the issue. What do you grab off the shelf when you're waiting to check out?
Dave Geren:
Oh, man. I mentioned the candy thing right earlier, so I was on the camp of, "Let's have candy at the checkout aisle," because I'm that guy. If I'm standing there long enough, I'll stare at it long enough, and it'll eventually just have to happen, so I'll grab the peanut M&M's and go for it.
Mike Fowler:
Oh man, that's a classic. You can't get it wrong there, and absolutely having those little incremental basket add-ons-
Dave Geren:
It's easy.
Mike Fowler:
... you've got to have that stuff, that's really good stuff. Finally, if you could tell retail brands one thing to keep in mind as they're approaching PLRs and just trying to think about the retail channel, what would that one thing be?
Dave Geren:
I would say the one thing... Well, I think at the end of the day, I'm going to cheat... This is going to be two things.
Mike Fowler:
That's all right. We'll give it to you.
Dave Geren:
But it is, think about the consumer through both lenses, the retailer's lens and your lens. A lot of times most vendors roll in talking about themselves the entire time and wanting to talk about how great they are, and how you need us. I think the ones that when are typically saying, "Let's talk about the end user together. How do we work together in a way that you're going to win and we're going to win?" And really focus more on that retailer and say, "Listen, these are the things we are doing to help you win with the end user," so you've got to know the end user. You've got to be able to say what they need and what they want, and you've got to be able to show how you can meet that need with the retailer, not just focused on why you're awesome, so being able to have an empathetic view through the retailer's eyes as well, I think is really important.
Mike Fowler:
Yeah. I think that's really wise and really good for our listeners and viewers to hear because that's really that PLR or that big first meeting is often the first step in what you're hoping to be a long-term partnership, so that's the step where you can say, "Hey, it's not all about me. This is about a partnership. It's about you. It's about growing our businesses together," so that's what those merchants are looking for, and that's a way that you can help them and help yourself.
Dave Geren:
That's right.
Mike Fowler:
Yeah. Well, Dave, thanks a lot for being here. Go Vols.
Dave Geren:
I appreciate it.
Mike Fowler:
Go Vols. Thank you.
Dave Geren:
That was a fun one.
Mike Fowler:
We appreciate you being on the show. And for all you Retail fans out there, thanks for tuning in no matter where you're watching. If it's Spotify, Apple Podcast, YouTube, wherever it is, click the little like button and hit subscribe. Maybe click that bell icon on the side of the screen so you can make sure you hear when Retail Oriented is coming out. And if you've got anything that you want to hear about or guests that you want us to have on the show, please reach out to us. You can go on our website salesfactory.com and fill out a little form submission there. You can email me directly, mike.fowler@salesfactory.com or go in the comments and please interact with us there, and let us know what you want to hear more about and who you want to hear more from. And remember, in the Retail Channel, it's all about selling in and selling through.