BURLINGAME, Calif. — As the confines of selling space disappear with the growth of online retailing, suppliers have the opportunity to regain lost clout, an executive with TNS Retail Forward said in a presentation here.
James Russo, senior vice president of the Columbus, Ohio-based consulting firm, said suppliers will have the opportunity in the next few years to redefine retail, “because a store is no longer just a store.”
“With the rules of engagement changing, shopping will increasingly be more about the experience rather than where it takes place,” he said.
Whereas retailers have called the shots in marketing and merchandising for the last few years, “the consumer's desire for more personalization in the shopping process and in the experience itself makes suppliers uniquely positioned to take a more active role in the retailing process,” Russo said.
What makes that personalization possible, he pointed out, is the proliferation of computers, broadband access, cell phones and text messaging, which enable suppliers to bypass the retail store and deal directly with consumers, he noted.
“Consumers are interested in engaging in more active dialogue, and suppliers have the opportunity to create more personal interaction — it's right there for you to grab,” Russo said.
He made his remarks during a daylong seminar sponsored by his company called “Retail 2015: New Frontiers.”
According to Russo, suppliers can defend their turf against incursions from private-label brands by getting into the private-label business themselves.
“For suppliers, the best defense is a good offense,” he advised. “Don't look at private label necessarily as a threat. Be aggressive, and look for revenue opportunities by taking a more proactive approach.”
Another avenue for suppliers to boost sales is “sustainable innovation,” Russo said — “not just brand extensions, but different products and better product experiences.”
He suggested suppliers ask consumers for suggestions, citing a Tyson Foods facility that doubles as a research laboratory that solicits consumer opinions, “which speeds up the flow of new products to market to a matter of weeks rather than months.”
Other supplier innovations, Russo said, include efforts by Heineken to create beer bars at airports; by Anheuser-Busch to develop niche beers, including gluten-free varieties; by Tylenol to allow consumers to develop their own flavors for its analgesics; and by hair-care manufacturers that put fixtures together specifically for use in supermarkets.