The classic ‘cut and thrust’ between account managers and buyers is changing. Striking the balance of meeting the customers’ needs while developing your employer’s bottom line involves flexible but focused negotiation. This means getting something in return when giving the customer a version of what they ask for. But retailers’ focus on front margin has taken variables off the table over the past 18 months.
GSCOP hasn’t helped the flow of these negotiations either. Posters, barkers, magazine entries, online profile, digital posters etc were all in play before the shift and though retailers famously pushed suppliers towards their ‘marketing partners’ who overcharge, at least the savvy knew how to get a good deal. The code’s cotton wool has backfired and these days product distribution is a trade-off for price and everything else in the ‘selling plan’ is not allowed.
But shopper marketing via PoS media campaigning is still an important part of the activation mix and is a big margin driver for retailers: large brand budgets of £3m-£4m are common and suppliers still get ripped off going through the retailers and their sales houses who use justifications like “you shouldn’t buy separately or use another agent because they are not aligned to our category strategy”.
Car park posters and digital screens are significantly cheaper on the open market vs retailer sales houses. Take also magazine entries: buyers will say it’s complicated to go outside because artwork has to be approved. Nope, approving artwork is easy.
As these spends are increasingly disconnected from the price/listing dialogue, ill-equipped trade marketers are often in charge of campaigns and get taken to the cleaners. They need training and help, just as account managers do.
The opportunity to create joint value for retailers and suppliers remains huge and when point of purchase campaigns are planned and executed brilliantly they can deliver significant sales uplifts. When a retailer sells media, the supplier should be treated as the customer. Retailers would attract more spend, taking appropriate care of brand investment. Perhaps it’s time you delisted the retailer media sales houses.
David Sables is CEO of Sentinel Management Consultants