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Too Many Brands, Not Enough Money

Shock horror. Major retailer Myer has announced that it’s cutting 100 brands to make way for ‘new’ brands. This follows arch rival David Jones’ earlier decision to also axe 180 brands.

It’s all about rationalisation, freeing up shelf space, offering more mid-market offerings blah, blah, blah. We’ve heard it all before.

Cry not for the brands, however.

Frankly, the decision probably makes sound commercial sense. If the soon to be gone brands aren’t pulling their sales/profit weight they should be deleted. It’s always up to the brand owner to drive sales by ensuring that it’s relevant to its target market.

What these decisions do highlight though is the critical need for brands to take greater control of their distribution channel destiny. Clearly, you can’t trust the accursed retailers with their competing agendas.

As I previously wrote, this could not be more cruelly apparent than with supermarkets where Coles & Woolworths are doing a brilliant job of leveraging the demand created by their ‘brand partners’ to create their own premium brands.

So where does that leave the poor old brand owner now shivering out in the cold?out-in-cold1

Go direct and retail intermediaries be damned!

Seek out your customers directly by connecting with them online. Open stores on Amazon and eBay. Build massive opt-in email databases and send regular eDMs focused on customers’ specific needs and interests. Engage your customers directly. If you don’t, someone else will and in all likelihood they won’t have your best interests at heart.

Ceding transactional control of your customers to retailers is an old paradigm. It’s not a redundant paradigm, mind you. If you can be listed in a major retailer, fantastic. Enjoy the ride and make your money.

But as hundreds of brand owners are now finding out, being on the inside with a retailer is not something you can or should rely on.

The only loyalty you can count on is from customers with whom you have a direct relationship. The margins are higher, the control is far greater and, if you do your job well, customer satisfaction will be the best it has ever been.

 

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Images:

http://www.perezfox.com/2011/02/03/the-tyranny-of-choice-what-to-do-with-too-many-brands/

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