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The New Distribution Strategies Your Product Will Need to Succeed

by: Geoff Ficke

Amazing changes in the retail marketplace over the last 15 years has created new, different obstacles to successfully launch a new product. Marketing romantics muse glowingly about the old days when there were supposedly multiple placement opportunities in every level of retail. True, there were. But on closer inspection, there are as many options now, if not more.

People and organizations are not usually open to change. Change is hard, requires a different thought process, imagination, flexibility. In the 1980’s there was a seemingly endless array of local, regional and national store chains, including department stores, drug, discount, food, hardware and mass merchandisers. Most are now gone. They did not change.

WT Grant, Montgomery Ward, Venture, Ayr-Way, Gold Circle, Hills, Super-X, Bambergers, B. Altman, Bonwit Teller and Wannamakers are only a tiny sampling of strong store brands that no longer exist. The new big box chains that have taken their place feature massive purchasing, merchandising and logistic assets. Certainly Wal-Mart, Home Depot, Macys, Walgreen and Kroger have earned their collective perches as dominating chains in their categories.

The question for small businesses and entrepreneurs is how to successfully place product in these retail behemoths. And if they can’t be penetrated what other options are available. The difficulties of selling a short line or a single item to Wal-Mart are daunting, but can be overcome.

To successfully sell the big boys, you have to adjust, change your terms and conditions to fit theirs. The key to the modern big box success is based on huge sales volumes, lowest price available and logistics that enable ever-faster deployment of inventory and resources. Software for shipping and receiving is as important as product features and benefits. You have to have the capacity to participate in these advanced control systems.

The inter-net and electronic media have created whole new sales opportunities that did not exist a generation ago. If Ebay counted all of the independent contractors they serve as employees, they would be the world’s largest employer. Over 700,000 entities now sell product through this vast, democratic, web community. Many make a full-time living from Ebay sales. This is an inter-net department store with an auction format. And there are dozens of other targeted web-based sites seeking inventory to sell as well.

Home Shopping Network, ANC, Shop at Home and QVC are simply electronic department stores and each has a huge appetite for new products. Every year these cable television retailers search locally and through on-air solicitations for fresh, creative, new products that can be demonstrated in this powerful sales venue. A product that sells successfully on HSN will soon be in demand on traditional retail shelves.

Years ago late night infomercials were the frequent butt of comic skits. Today major companies such as Proctor & Gamble, General Motors and Estee Lauder utilize this sales venue. Hundreds of products are launched in short format infomercials each year, and many succeed. These spots can be produced at amazingly affordable prices and test media buys mitigate financial risk. Most big box stores feature an area displaying the “As Seen on TV” logo. It is much easier to penetrate the bureaucratic maze of a national chain with a bit of proven sales success in hand.

Much as TV infomercials have revolutionized product marketing, an even less expensive strategy can be undertaken utilizing print media. Main stream newspapers, magazines and print supplements increasingly sell print

Advertorials. An Advertorial is an article that reads and appears to be non-commercial, but contains a specific product message. These have been extremely powerful guerilla marketing tools, inexpensive, easy to monitor and strong revenue generators.

There are many other potential avenues to pursue in order to create sales traction for a product. Publicity campaigns (have the advantage of being free), specialty catalogs, remittance envelopes, commission sales coverage, and a customized web-site with an online pay-per-click program are just a few.

The old days and stores are gone. We only have the new days and a whole raft of new opportunities to utilize. Maybe Lowe’s is not the place to launch your product. Successful pursuit of a guerilla option will enable a product to develop a sales base, sales, traction and growth. This will level the negotiating field when the big box presentation is made.