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Why Retailer Market Fit Is Important For A Product Startup


Many innovative product startups dream of getting into stores like Walmart, Best Buy, Costco and more, but fail to think about whether that is even a good thing. Don’t get me wrong, getting your product into several thousand stores can be great, but if you’re not ready to handle that business your retail dreams may be short-lived.    

Most startup brands don’t spend enough time thinking about retail alignment and in the process miss valuable market opportunities, or even worse, get opportunities that nearly bankrupt their company. Today’s modern retail ecosystem is dynamic, complex, and involves multiple channels like large-chain, specialty and regional stores, catalog retailers, ecommerce sites, TV shopping networks, incentive, and reward marketing channels, and B2B verticals like hospitality, travel, and more. Navigating this ecosystem requires planning, skill, and expertise and can make the difference between a company remaining a one-SKU product selling on their website or a multi-SKU manufacturer selling to major retailers.   

Good retail alignment means you’ve mapped out retailers and channels that are ideal for you at different stages of your company’s growth. It is closely aligned with your go-to-market strategy and provides a roadmap that supports controlled growth over an extended period. Here are some things to think about when planning your retail alignment for long term product growth.  

Retail Store/Channel Size

Pairing with the right size retailer and channel is one of the biggest keys to successfully scaling in retail. Many young companies automatically think bigger is better, but it’s not. At any given time, your retail alignment must be in-tune with your capacity to take on that retail channel. For example, large chain retailers like Target, Walmart, CVS, and Sports Authority can give you a big purchase order but sell-through in big box chains is everything. If your product isn’t selling, you’re out, and where do you think your inventory is going? Yes, straight back to you. Now, you are sitting on a stockpile of product with no retail revenue to pay for it. Conversely, if you start small with online channels, regional specialty stores, or a catalog company and make sure you have your logistics, product support, and marketing in place, getting a purchase order from Walmart can be the perfect next step. Good alignment with the right size retail channel that supports controlled growth is always better, especially when you have inventory, supply chains, and manufacturing to worry about. 

Retail Store/Channel Category

For many startups their product is their baby and its natural to think everyone will want their baby. The truth, however, is that although your product is a great fit for many retailers, depending on your stage of growth, your product can’t just fit it must belong there. When you think about retail alignment, understand why a store or retail channel is right at this moment in time. Maybe it’s a good size and specializes in your category of merchandise, or maybe it is close to where you are for shipping and product support purposes. Whatever the reason, make sure you shop the store or channel you’re contemplating to ensure they a) support your category b) are not flooded with similar product and c) actively promote new and independent brands. Good retail alignment means that your retail channel can reliably highlight your product and show its value to consumers.

Retail Marketing Channels

The retail channels you align with at different points in your growth cycle are also important because of your supply chain. If you are not already manufacturing and shipping thousands of products, you need to think small and grow. Although retail stores and Amazon can get you consumer exposure, you must be aware of demand. The last thing you want is to get into a retail channel you can’t support, you get a bad reputation, and you don’t get paid. You also need to think about your 3PLs, reps, and distributor channels. These support networks can be integral to your growth but aligning with the wrong one can cost you. You should look at reps and distributors the same way you look at retailers – do they cover my product category, how many other products like mine are they representing, do they have direct access to retailers I am targeting, and most of all will they be passionate about selling my product? Third-party relationships are a commitment, so like retail stores, make sure you do your research.  

In the end, good retail alignment means you are selling through the right channels, the right sized and positioned retailers, and in a way that harmonizes with where you are operationally. Good alignment means you are successfully delivering product, supporting product issues, and most importantly getting paid. Interested in getting your product aligned with the right retailer but don’t have the time or experience. Contact Robert Bruza, our Director of Business Development via email at [email protected] or visit www.retailbound.com to get more information

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