President and founder of Retailbound, Yohan Jacob, spoke with us this week about the Third Party Merchandising industry and challenges for 2015.
Store closings were the biggest challenge of the year. He noted that retail stores are closing faster now than in the past, due in large part to pressure from online retailers like Amazon.com. This is true for a number of retail chains including Radio Shack, Barnes & Noble, and Staples.
This news is relevant to retail merchandising firms for two reasons. First, the rising level of store closings could lead to lost clients. Yet, second and more importantly, it can be an opportunity to gain prospective clients. As an Ernest and Young retail guide pointed out, a healthy supply chain can make or break a struggling retail store, and the investment to develop that chain is worthwhile even in difficult financial times.
This is where retail merchandising firms can to show their competency and ability to raise the standard for outstanding merchandising. It’s a time to show off a little. Anything firms can do to optimize audits or better understand their clients needs will make them an attractive business partner.
Another crucial observation that Jacob made was that leaders in the Third Party Merchandising industry are “finding ways to make the in-store experience as best as possible.” This is a reflection on the emerging fight in brick and mortar stores against showrooming, or the consumer practice of experiencing a product in-store and then buying it online for a cheaper price.
And Jacob isn’t alone in this reflection. Ben Pivar, from outsourcing firm Capgemini in a Forbes article also stressed the importance of a personalized consumer experience.
Much of creating an exclusive in-store environment has to do with creative merchandising. For example, the store may want to sell limited edition items that customers can only purchase in the store. For strategies like this Jacob said firms “need displays that are engaging.” One way this can be done is by creating a question and answer experience that encourages the customer to interact with the product.
Another strategy merchandisers are initiating against showrooming is the use of beacons. These are sensors that can be attached to critical places in the store like a shelf or a promotional display that will communicate with mobile devices to give the shopping experience a more intimate feel.
Jacob’s insights into understanding the downside of store closings and showrooming and fighting them with innovation will be key in 2015.
Another trend facing B2Bs in general, but specifically Third Party Merchandisers is fighting customer churn with increased transparency.
Marketing writer Christine Crandell explores the causes of B2B customer churn and how to avoid them. For merchandising firms, more clients want data that shows the firm is providing value to the brand image and is raising revenues. Not only will they want data, they’ll want it consistently and expect it to improve over time. Merchandising firms may increasingly look towards Field Activity Management software solutions to address each of these trends.
Tools such as these can help merchandising firms keep track of the health of their clients, allowing them to project if their clients’ stores are in trouble. These solutions also often come with the ability to conduct customer surveys to gain critical insights into what drives in-store purchasing. Additionally, the custom forms feature of many Field Activity Management tools will enable merchandising reps to easily gather data and share it in real time to match the new expectations of clients.
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