- I stands for Independent.
- I’m in …maybe not!
- Results trump process
- Exceptions kill results
A typical buying group is a collectivity of Independent retailers who agree to join a collective effort in order to gain an edge in the retail battle they wage every day. The true nature of this retailer is that of an Independent… spelled with a capital I.
These men and women are not the regular 9 to 5 managers but entrepreneurs who risk a lot, sometimes all they have, to run their own business. In addition to financial reward, they seek the freedom to make their own decisions. Alas, the market realities of today’s market place are such that a single voice trying to be heard over the din of promotional powerhouses is almost inevitably drowned out. And then, globalisation has all but rendered the buying power of an Independent ineffective with most factory driven vendors.
Group action presented itself as the smart response from the Independent channel, combining the local business savvy of the local Independent and the power of the group thus delivering the buying and advertising power to the local Independent.
Easier said than done … you see, asking Independent retailers to agree to be interdependent is quite a challenge.
“The speed of the gang is often the speed of the slowest member”
Buying groups are challenged to generate cohesiveness in group actions… This approach, while very democratic, has some perverse effects: first, results are usually slow to achieve and the group runs the risk that non-progressive members slow the process, often to the point of discouraging the progressive dealers and a project falls way short of potential.
Corporate organisations such as box stores could be perceived as slow to react compared to the “nimble” independent retailer, however, experience has shown that reality is often the exact opposite.
A group must set guidelines to allow for quick actions when an opportunity presents itself.
The vast majority of independent retailers are convinced that what might work for every other member of the group will not work for them, in their market, usually expressed as such:
Attempts at cohesive group action are most often filtered through the individual dealer’s perspective. If the group is choosing some products for a core program, many dealers will most likely go along if it’s a product he already has on his floor. If not, it might be OK, providing he deals with that specific vendor. However, if he does not carry that vendor’s product line, a defense mechanism kicks in and generates the classic reaction:
“This product won’t work in my area… my market is different!”
Just as each independent dealer is unique, so is his market. Therein lies the challenge of group action; to make an offer that is so compelling that it can surmount the “uniqueness” defense mechanism.
I can do better than that!
Buying and selling stuff is the most enjoyable part of retailing. Surely retailers do not get into the business because they like the hours and demanding customers!
In order to succeed, they must also believe they have a unique talent for buying and selling, and, consequently, view a buying group deal with certain amount of skepticism. Most of them truly believe they can get as good a deal as the group can.
“I” before we
The member’s priority is his/her business. Day in and day out, they are faced with challenges that can overwhelm their capabilities and experience, bouncing from logistics problems to personnel issues, from product availability to product reliability problems, from sometimes unreliable staff to difficult consumers.
All these rest on the owners shoulders and they deal with it… most of the time alone. So when they get together in group meetings, they may feel a sense of kinship and camaraderie that will carry the day. They will agree to collaborate and cooperate with other members through the group. All for one and one for all!
Together, WE will win the battle!
Then, they get back to their reality…. And, inevitably, in many cases, it reverts to a game of survival and “I” takes over, and WE takes a back seat.
“I” stands for Independent!
I’m in! …maybe… maybe not!
As mentioned in previous posts, managing a retail operation can be a lonely job and the feeling of kinship member’s get when they get together is very strong with most members. So when his buddies agree on something, many will go along, motivated by a “team spirit”. But, when they get back to the store, that team spirit is weakened and their participation is revised.
That probably explains why members will raise their hands when the group merchandiser proposes a product for a group buy or a group promotion but sit on their hands when the time comes to follow through and write the P.O.
Or, the darker reality, is the member who will use the group buy as a starting point to negotiate his own deal with his preferred supplier!
Results trump process
Cohesion among banner members is a great thing as it solidifies the message sent to the consumer, improves the negotiating power of the group and provides the glue that helps members stick together through thick and thin.
Many a banner manager has lost the traction with his members by focusing more on process than results. I have seen a banner manager threaten to expel a member, who was a solid performer, but the color of the floor tiles in his store were not to banner specifications. Extreme example you may say, however, an actual example of focussing too much on process at the expense of results.
Processes and rules are tools to help achieve results… they are not the reason a retailer joins a group or a banner program.
The key here is to focus on targeted results, and to get tacit agreement from the banner members on the targeted results.
Exceptions kill results
Uniqueness begs for exceptions… and exceptions kill results!
Or, the mathematical equivalent would be: 1 + 2 = 0
- 1. As stated earlier, every retailer has a claim to uniqueness, either of his market or his demographics or his team… but he is unique.
- 2. On the flip side, the very reason Independents join a group or a banner is that, more often than not, they don’t have the buying power nor the advertising power of the big guns… So they join a group/banner: Strength in numbers!
- 0. So, uniqueness begs for exceptions… exceptions weaken buying and advertising power… and that is how one gets this odd arithmetic where 1 + 2 = 0
Hence the banner/group manager is faced with a challenge… satisfy every participating member and weaken the program or piss off a few members and weaken the program: choose your poison!
However, there is a however to this challenge, as with any poison… “It’s the dose that makes the poison”
The real talent for a manager is knowing when to say yes to exceptions and when to say No!