In 2014, when it became clear that internet shopping was here to stay, Mike Massey founded Locally in order to solve a problem that was becoming clear: allowing consumers to see what products where actually in stock at their local stores. At the time, on-hand inventory and what brands stores carried was invisible to shoppers. So Massey and his team built Locally as the solution.
As a third-generation retailer himself (Massey鈥檚 Outdoor), Massey has had his finger on the pulse of retail for a long, long time. We sat down with him to talk about the state of our industry, how brands can support their retailers, and what it takes to navigate the current climate of the outdoor industry.
What are the top three ways brands can support their retailers, and why are they so important?
First up, clean distribution networks. Retailers that burn the goodwill between brands and retailers created by discounting or selling in questionable sales channels take more from long-term sales than they generate in short term growth. It鈥檚 not worth it.
Second, resist the urge to create channel conflict. Building channels that compete with one another (with bonuses for channel performance rather than company performance) lead to confusion at the shopper level. Consider how Apple moves customers between channels seamlessly and work to build a similar approach.
And finally, share data and make it actionable. Systems that help retailers achieve a higher level of merchandising sophistication increase the likelihood a shopper encounters your products鈥攁nd product encounters are the holy grail of goodwill creation.
How does the current climate change what brands need to do in order to earn their spot on the shelves?
Inventory. Inventory. Inventory. Most manufacturers de-risked their inventory last year by cancelling planned production, but those that didn鈥檛鈥攐r those that responded more rapidly to surges in demand are reaping the benefits. Also, brands that are providing retailers with more consumer behavior information and tying it to stock are seeing accelerated turnover.
Looking forward, what changes or moves will brands need to make to thrive coming out of the current state of retail amidst the pandemic?
In my opinion, physical retail continues to be the least optimized channel. While online shopping dominates consumer behavior, actual purchases are mostly happening in nearby stores. Removing the four largest online retailers, all other online retail is mid-single digit. Virtually all growth online is being consolidated by those four companies鈥攚hile local retail is actually growing鈥攁nd is over 80 percent of total sales. More than anything, brands need to be on store shelves, and they can do it by delivering strong support and providing killer tools to make life easier for retailers.
Brands and retailers have to work together more than ever to ensure that everybody remains healthy. The ones who just say this current state of the industry as an opportunity to boost themselves proved to be counterintuitive. They were the ones that had the hardest time gaining traction.
What does the future look like for trade shows, and what does this mean for the brand and retailer relationship?
Now we know鈥擹oom sales meetings don鈥檛 work. People want to meet the people they want to partner with. Brands want to meet their retailers in person and vice-versa. The internet is a wonderful tool for sharing data, but it simply doesn鈥檛 substitute for how shoppers or buyers actually want to shop; in person, talking to the person they are buying from.
The thing that is occurring that I think is really powerful is this “micro-tradeshow” format, like regional rep shows. I think those will gain relevance because they are better curated and personal. Whereas very large format trades shows are easy to get lost in, and it鈥檚 very difficult to make personal connections during those larger shows.
What do you see happening out in the industry that brands should be doing for their retailers, but aren鈥檛?
Any brand that isn鈥檛 referring shoppers to nearby purchases is missing an enormous opportunity to build goodwill with both their retailers and the end consumer. Local stores are extremely good at fostering enthusiasm for specific brands. Many brands’ entire marketing strategy is powered by the very goodwill that collaboration helps create.
On the other hand, brands with poor local distribution are often entirely overlooked by consumers. They buy the products that they see in their favorite local store鈥攂oth in that store and online.