Prepare for wholesale change

The wholesale sector represents the last great untapped marketing opportunity, but now even superbrands like Coca-Cola have realised its potential for achieving growth. By Jo-Anne Flack

The wholesale sector represents the last great untapped marketing opportunity, but now even superbrands like Coca-Cola have realised its potential for achieving growth. By Jo-Anne Flack

If point-of-purchase (PoP) is considered the less glamorous end of marketing, then PoP within the wholesale environment really means you’ve hit rock bottom. But, as retail space becomes increasingly competitive – coupled with the ability of multiple retail owners to control every square inch of their stores – the wholesale environment has emerged as an untapped marketing opportunity.

The main problem has been the reluctance, or inability, of brand owners to understand that retailers need to be persuaded to buy stock in the same way that regular consumers are.

Like consumers, retailers come in many guises, but the prime contenders are the cash and carry customers and the independent – or corner shop – buyers.

According to Cris Beswick, the founder of Beswick Design: “The point that many manufacturers and brands within the wholesale environment seem to miss is that typical independent shop owners are still customers. They may not buy in the same way as consumers, but they are customers nonetheless.”

Creative Limitations

Everyone seems to agree that, by the same token, there should be little difference in the creative and sales objectives of PoP material in the wholesale and retail environments. “They both need excellent stand out, stock loading and conversion,” says Gerry Hebron, joint managing director of id*a. “It is the simple objective of shifting lots of stock in a short timeframe that drives most wholesale and cash and carry activity, and this can naturally mean limited creative opportunities – ‘cheap and cheerful’ is often the brief.”

This last point is probably largely responsible for the smaller budgets usually allocated to PoP within the wholesale environment.

Beswick adds: “I don’t think many clients understand the importance of wholesale. It’s not the glamorous side of the business.”

But there are other reasons why the wholesale channel has been underused.

Hebron suggests: “Over the past 20 years, the trend towards the majority of packaged goods and health and beauty products being sold through major retailers has led to the diminished importance of the wholesale and cash and carry channel for most brands, and this has seen the available budgets suffer accordingly.”

Yet Beswick and others believe that, because the wholesale environment is relatively underused, it provides a great opportunity for clients to deliver a message.

Beswick says: “These guys [the retailers] come in once a week and do a regular cash and carry stock run, and this is where complacency has crept in. No one is thinking ‘how do we make this guy buy our product?’ This side of marketing has been overlooked for far too long.

“And as retail becomes more competitive, brands need to be thinking of what areas may be left that are less competitive, and where they can achieve some growth.”

The senior account manager at Billington Cartmell (BCL), Alex Dawe, says: “The economics of wholesale activity are compelling. It is extremely difficult to gain display in a retail multiple such as Tesco, and even when expensive display agreements are signed up, all too often the materials simply do not get sited at store level. In contrast, a well-executed campaign in Booker, for example, can often be sold in without money changing hands, while siting and compliance can more readily be encouraged by giving incentives to the fork-lift truck drivers tasked to wheel the pallets of stock into position.”

So how easy is it, in vast, cavernous warehouses, to create PoP material that will catch the eye of a buyer who probably values bargain offers above all else?

Positive from negatives

Hebron says: “Warehouse and cash and carry outlets tend to be poorly lit and dirtier than retail stores. They are tall, crammed with products, governed by strict health and safety laws, and full of fork-lift trucks rushing around. Some of these features can work in your favour. For instance, in a poorly lit environment, using lighting effects can really create ‘stand out’, and works incredibly effectively when combined with noise and movement. Height can also be used to add impact and scale to PoP material.”

Dawe agrees that big works best in these spaces. BCL developed the Win a Donkey promotion for Ribena which was the cue for an idea – the use of huge temporary inflatables – that it has repeated for other wholesale promotions such as huge inflatable Mini Coopers (also for a Ribena promotion) and, for the launch of the new Lucozade apple variant, a large, branded apple.

He adds: “In these spaces, quirkiness is the best way to get attention, rather than just using posters.”

However, it does seem to be the “beacon” brands – such as Coca-Cola, Ribena and Kellogg – that spend money in the wholesale sector, and the question has to be asked whether it is necessary for these brands to do so. Isn’t it accepted wisdom that any retailer ⢠will have to stock these brands if it wants to make a living?

Martin Fawcett, creative director at in-store design company Bezier, believes that, despite the fact that these superbrands will be carried in retail stores anyway, it is important that brand owners continue to communicate with the trade.

H e explains: “Even the big brands need to keep retailers on board. They represent the third salesman. It is also important for retailers to know that the brands they are buying from represent people who know how to communicate. If the retailer is being communicated to properly, then so will consumers, and that is very important to retailers.”

The appeal of brand value

Peter de Wesselow, operations director for FPP Brand Communications, adds: “It is important to remember that retailers shopping in this environment are consumers themselves. Use your brand values to appeal to them on both a personal and professional level. The Coca-Cola on-pack promotion to win World Cup tickets may appeal to the retailer for its incremental sales potential, but why not overlay this element with something targeting retailers specifically. For example, an ‘instant win’ for football prizes communicated inside case trays. To take this strategy one step further, the wholesalers themselves can be incentivised to maximise displays and sales. Coca-Cola has been known to reward all the staff from one winning department with a trip to a football match. This represents consumer brand positioning applied well across the trade hierarchy.”

Beswick agrees with the idea that even famous brands need to promote themselves within the wholesale environment. Beswick Design has been working with Burton’s Foods to help raise its biscuit category profile in the trade sector, in line with its retail strategy. He says: “Biscuits are the third-largest grocery category and – as a share of trade – independent convenience stores sell more than anyone else. This shows the importance of the wholesale outlet as a sales arena.

“Wholesale customers build relationships with manufacturers and their representatives rather than just brands. The in-store communications need to support the potential to build customer loyalty.”

But if the wholesale environment has been given little consideration until recently, it is important that, when it is used, it is part of an integrated campaign, and not used in isolation – even allowing for the unusual physical dynamics that are required.

Leverage promotions

Hebron explains: “To increase conversion, it is essential to integrate your activity across the entire distribution chain. The knowledge that a product will be heavily promoted to consumers will always be a sales driver within wholesale. Using similar promotional techniques such as sampling, competition and kiosks – as used in retail – can often lead to incredible uplift.”

There does seem to be an increased interest in the wholesale environment on the part of manufactu- rers. Fawcett, as a creative director, has noticed more work being commissioned in this sector – probably because the other channels are being squeezed so much. And until the wholesale environment becomes as competitive in terms of promotional activity, there is an opportunity for brands to make a lasting impact.

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