SALES & MERCHANDISING
Sales agents help grow business
As the hardware channel undergoes structural change it could be time to engage a sales agency, according to David Burton, who recently investigated how retailers should consider the use of third party sales agencies, particularly during such a tumultuous time in the industry.
Masters’ future is yet to be decided, at the time of going to press, and its sites are desired by a number of major big box retail operators, including Bunnings, which is thought to have identified up to 12 locations that might gain ACCC approval for acquisition.
At the same time, Metcash is waiting on approval to proceed with a bid to merge Woolworths’ Home Timber and Hardware Group business with its own Mitre 10. It may or may not gain approval. In the meantime, some independents are jumping ship to other wholesale buying groups as they await final confirmation of how the retail hardware landscape will look from the second half of this year.
Enter into this situation the sales agency, with its ability to deploy teams of sales and merchandise professionals into any chain or group with rapid effect.
These firms are already calling on Bunnings, Masters, and major independent stores on behalf of a fine array of clients. They will obviously gain business from the need to cover stores that have realigned with other groups, as planograms are reset.
As one Masters store closes and the call drops off the cycle, it is an opportunity to use this time in gaining distribution or confirming promotional stock at a store elsewhere. With all this going on it is an opportunity to take a look at using third party sales agencies in your business if you are not already doing so.
Paul Baxter Agencies improves sales
2016 has been a bumper year for Paul Baxter Agencies, with owner, Paul Baxter, saying the company has experienced excellent growth with its turnover; however, the costs of servicing in this vast network across a very large country have risen disproportionally as well.
“We are definitely working harder to stand out in this competitive market. Retailers must be doing it tough because staff numbers appear to be down and orders are reducing nearing the end of the 2016 financial year,” he said.
According to Mr Baxter, consumers are remaining loyal to recognised brands. Control or generic labels are on offer, and have a place in the range, “but it is the confidence in the established brands that are winning the purchase,” he said
Addressing the Masters sell off issue, Mr Baxter said, “Masters is still relevant until it closes its doors. Its presence in the market is significant, with stock promotions highly visible, and stakeholders in the industry are watching to see what becomes of its network of stores.”
He said that Masters’ successors may be very relevant over the next 12 months. Looking at sales performance, Mr Baxter nominated Victoria and New South Wales as performing better than the other states at present.
“The two big mining states of WA and QLD are experiencing a period of less spend within their economies, while the higher populated southern region is a buzz with activity in comparison. This includes Tasmania with terrific proportional growth,” he said.
With an eye on the sector’s future, Mr Baxter believes that the hardware segment is heading towards a ‘reduce costs’ period that is not necessarily the right strategy for long term business growth for all companies.
“The cheapest option is not always the best. Invest in quality suppliers, quality products and quality services. Value should be paramount. An improved experience for the consumer should be the united aim,” he said.
Mr Baxter also said low cost products or services are not likely to consistently achieve this objective and his advice to retailers and suppliers is to partner with service providers and range of products that enhance relationships, enhance the overall experience of the purchase, and represent good value for money for consumers.
Superlink is ready for expansion
Superlink director, Phil Streng, also believes that the hardware sector has benefitted from a tight economy, due to the fact that “people generally will now attempt to fix things themselves rather than call out a handyman.”
However he said that when looking at growth over last year, it would be low single digit increases and part of this low growth issue is likely to be based on reduced inventories.
“Stock on hand is now monitored very, very closely and overstocks are a supplier’s worst enemy when dealing with hardware, particularly big box operators,” Mr Streng said.
On the brands versus own brands debate, Mr Streng said that generally consumers are still buying brands per se without really knowing if it is a brand or not.
“Certainly the big brands dominate and are now all relatively cheap compared to what they might have been seven to 10 years ago. Again, the economy plus market competition is keeping prices low across most categories, so therefore there is no real need to promote house brands,” he said.
Mr Streng believes that the big players, such as Bunnings, are clearly looking to reduce the number of suppliers that they have, not necessarily the total number of SKU’s ranged, and to this end he expects we will see a consolidation of actual suppliers.
“This will mean that, as an example, if you supply a garden/lawn fertiliser category product currently, then you may be approached to increase your manufacturing offer to include or replicate other items in garden care, at the expense of another, possibly smaller, supplier,” said Mr Streng.
“I think also there is a growing trend to have service providers controlling and being held more accountable for overstocks and out of stocks,” he said.
The use of supplier owned and maintained technology for ordering, ranging compliance and ad hoc reporting is becoming a must, according to Phil Streng and Superlink also use Opmetrix software on iPads for this purpose. Planogram compliance is also an issue that sales agents are ideally placed to deal with. Mr Streng said that while most retailers will say ‘we don’t do planograms, that is part of the problem’… they should.
“Suppliers changing layouts and taking other suppliers’ space creates unnecessary and costly down time for reps to try and fix at the next call,” he said.
Strikeforce is Australia’s leading outsourced sales and merchandising team
Continual investment in its people and technology has guaranteed continued success for Strikeforce within the home improvement industry. Strikeforce maintains its strong competitive advantage by leveraging the best practice field merchandising technology and selling applications, particularly through its cutting edge technology. It ensures maximum sales in the home improvement channel, by equipping each of its brand ambassadors with the latest mini iPad technology, smart phone procurement app and Bluetooth scanners. Strikeforce not only has a wealth of knowledge and experience which is shared with its clients, but also offers financial solutions that reduce complexities and costs at the same time, believing that it makes sense to utilise a one-stop sales and merchandising solution.
Merchandising / Field services
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