Monday, June 20, 2011

Integrate with Manufacturers’ Sales Staff

The store-within-a-store format has become popular enough for variants to have developed:
  • Leasing out space within your store to another retailer. Examples include Starbucks, Seattle’s Best, and Peet’s operations set up inside general merchandise stores and supermarkets.
  • Leasing out the space to a manufacturer. Examples include EstĂ©e Lauder and Shiseido, maintaining sales counters within department stores, staffed by employees of the cosmetics companies.
  • Having employees of the manufacturing company selling directly to your store’s customers on the regular sales floor, often with the manufacturer’s employees dressed to communicate to the shopper the true employer’s identity. Jones Apparel had tried this in stores selling their products.
     Manufacturer-run SWAS formats work best for product categories where consumers identify strongly with brands and where competition among retailers in selling favored brands is high, according to research findings from Carnegie Mellon University and University of Pennsylvania.
     Researchers at Michigan State University and Daejin University in China looked at the issue from the perspective of human resource management instead of product line. How well are the manufacturer’s employees integrated into the hierarchical management structure of the store?
     These employees will be perceived by shoppers as a hybrid of the store’s and the manufacturer’s brand identity. They are the retail store equivalent of the mythical half-horse, half-human centaur. Except that the salesperson turns additional inventory when they’re more than mythical.
     The manufacturer’s employee on your sales floor may feel in conflict about who evaluates and rewards their performance. It is in your interest as the retailer to have the manufacturer yield primary control to you. Here are tips on making this more likely, based on the Michigan/Daejin research and organizational psychology findings:
  • Describe to the manufacturer the many uncertainties in selling their product line and provide ongoing feedback about the amount of sales, why people seem to be buying, and what seems to be getting in the way of more purchases.
  • Keep the manufacturer’s employees informed on your expectations for in-store behavior and dress codes, and enforce those expectations. Promptly resolve any inconsistencies between your expectations and the manufacturer’s expectations.
  • Insofar as possible, include the manufacturer’s employees in your store training and invite them to staff social events. Since these employees will probably need to be paid wages for their training time, negotiate for this with the manufacturer.
  • Provide to both the employee and the manufacturer specific, unambiguous information about the job performance of each employee.
Click below for more:
Open Up Profits Using Stores-Within-A-Store
Keep a Store-Within-A-Store Compatible

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