David Shear continues his series on the state of retail.
Success in retail depends on your company’s current understanding of the overall retail landscape.
You may have understood where retail was two years ago, you may have had your finger on the pulse in 2007, but the market isn’t what it was two years ago. Are you seeing the changes that have taken place, and more importantly, are you seeing and reacting to the changes that are on the way?
One year ago Palo Alto Software (PAS) was watching retail sales decline because of a fall in overall retail software sales. The retail channel had changed significantly over the previous years and now the bad economy was beating up retail even more. We needed a new aggressive strategy to win in the new retail landscape.
There was a sudden realization that our approach to retail was destined to fail because it wasn’t evolving with the market. When a sales plan becomes stagnant, it is a sign of decline. To counter the decline, our management team threw out all of the things we thought we knew about retail and we started to rebuild our sales plan from scratch.
If your company is thinking about entering the retail channel or creating a new plan for your existing products, there are key questions your management team must be able to answer. Starting with:
Who is your competition and how are they positioned?
I know this seems like Sales 101, but these key questions too often get overlooked: Who is your competition? What is their price strategy? Where do they sell their products? Who are they using for distribution? Where is your competition not selling? Where is your product vulnerable and where are your opportunities? These questions must be on your management team’s mind at all times. Once you have the questions answered, you need to ask them again and again, because the answers are always evolving.
A good management team will asses the changes in a market, and look at the competition, and adjust and finesse their strategy. Once we started to really dig into what needed to change, we identified additional distributors we needed to sell through, we revamped sales strategy and we identified a new market we were well positioned to reach.
PAS ultimately created a brand new product, Start Run & Grow Your Business (www.start-run-grow.com) after assessing the retail landscape, and implementing a new more aggressive retail strategy. Start Run and Grow Your Business appeals to a different type of entrepreneur and small business owner, and its lower price point has opened up new channels and retail outlets.
These key moves have boosted our retail sales enormously and this would not have been possible if we hadn’t been asking the right questions.
Next time: Know a guy who knows a guy.