If manufacturers aren’t researching then they’re probably guessing

I happened to be shopping this weekend for an accessory for a personal electronic device. Nothing special but it was a little specialist and knowing this I thought the best place to head was Singapore’s Funan IT Mall. Here over several floors you’ll find a range of specialists offering everything from high end audio to hello kitty iPhone covers.

Many of these guys are sole traders, a few of which might have a couple of outlets in the mall. Most of the staff know their stuff and if you happen to know exactly what you want and can find the store that sells it, there’s a good chance you’ll get just what you need.

But here’s the thing, what if you’re not sure? Well then it’s a frustrating experience in one store after the next your met with blank looks or faint recognition which ultimately ends in disappointment. But here’s the kicker – when you, the shopper ask, “do you know where I might find something like that?”, there appears to be a complete reluctance to suggest somewhere else. Why? In case someone else gets the sale!

The following idea may seem utopian but here’s where the world of online could help. Millions of microsites and blogs earn decent money out of referral revenue – they get paid for directing shoppers to where they can find an item. Why can’t this happen in the the bricks and mortar world? Everyone wins – the shopper who finds the product, both the retailer who makes the referral and the referee who makes the sale and finally the manufacturer.

So why is that these things don’t happen? I see three key reasons and they all spring from the manufacturer. The first is that few manufacturers really make the effort to find out the role independent retailers play for shoppers. In discussions with TNS recently, a friend in the know estimated 10% of revenues came from shopper studies – that’s up nearly ten times since a decade ago but still not a lot of investment. If manufacturers aren’t researching then they are probably guessing. Guesswork is rarely the best way of understanding human behavior.

Secondly manufactures underestimate independent retailers in their prioritization of different trade segments. You only have to listen to the language they use – “general trade”, “traditional trade”, “distributed trade” of perhaps worst of all “lower trade” are common terms to discernible independent retailers. Traders are seen as being low volume and so they are often de-prioritized in favor of more ‘organized’ retailer channels. Big mistake! independent retailers can be huge influencers of shopper behavior in many cases and often deliver higher profitability.

The last reason is that the solutions manufacturers create for independents don’t look at the opportunities for everyone to make money, rather they focus on shifting more stocks.

If independent retailers play an important role in the path to purchase and they represent a profitable vehicle for influencing shopper behavior, then it’s high time manufacturers started to think more creatively about marketing in these outlets. 

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2 thoughts on “If manufacturers aren’t researching then they’re probably guessing

  1. This thought-provoking article truly hits the nail on the head. We always recommend that research be conducted in advance of launch to avoid costly mistakes. Plus, the comments about independent retailers and their potential value are spot on.

    • Dave, many thanks hanks for this positive comment. I often feel that many view shopper marketing as being something that one does solely with big retail, its nice to see that others do not endorse this view!

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