Thursday, January 28, 2010

Looking For New Markets To Sell? Go Shopping!

Economies change and a rep might find entire customer bases disappearing. The last 20 years have seen more changes in retail, buying traditions and markets than anything that had been seen in the previous 100 years.

Home computing and the internet is the reason, of course—consumers able to buy stuff at home via their desktop…but also because technology so radically changed the way things are consumed. Listening to music and taking snapshots are two examples where retailers set up to handle those activities—CD/Record stores and Film Processing centers, are no longer needed.

It’s important for a rep to constantly be adding lines, making relationships with new vendors. Even if the product a new vendor carries is not especially attractive to the rep right now, it may very well be in a year or so. This will enable the rep to morph into similar industries to those that he or she has now, but that are a bit more stable and will last longer than the markets threatened by change.

Make a point of shopping around…look at other retailers and think how they may use products you sell. Look online too—can that website add to their product offerings with any of your lines?

Shop beyond your immediate industry, or learn from other industries you sell to, to prepare yourself for the pitfalls you may encounter with that new category of wholesale customer you may be trying to win over. An example of this follows…

The licensed products industry, particularly in music related licenses, has lost a tremendous amount of account base in the last decade due to the decline in sales of CDs and other forms of recorded music. Listeners download or rely upon for their needs. So, where to turn?

Musical Instrument retail seems to be a good choice. The community constantly cries out they are in need of better margins, which licensed apparel, printed goods, accessories, collectibles provide. The problem is this: most of these retailers are not well-schooled in boutique-type merchandising techniques. So the challenge to the rep is not just to sell them some line or a few lines, that will sit there wasting away among a mass of guitars, amps, keyboards, cables and effects boxes…the challenge is to educate them as well on techniques in setting up a boutique area in their stores.

There is no better way to do this than the rep to share success stories with these musical instrument retailers. Look at some of your other retail accounts—the good ones. What do they do right? What have they tried that turned out to be wrong? What fixtures were most effective? What kind of employee are they looking for who can take care of that department? How labor intensive is it, and what are some ways to make it as little labor intensive as possible?

Luckily most of us in the licensing industry will come across a product sporting a tried and true brand or logo, and in my own case, this would be Harley Davidson. This is the perfect role model for musical instrument stores to follow; indeed I had one particular musical instrument retailer even tell me as much.

Thirty or forty years ago, the typical Harley Dealer sold motorcycles, did repairs, had a shop with some custom parts like exhaust pipes, gas caps, mirrors. Their motorclothes offerings may have just been a few leather jackets. In other words, the customer base was limited to riders and owners of Harley Davidson motorcycles.

Now, look at the typical HD Dealer today. The motorclothes department is a huge boutique that appeals to many beyond that biker customer base. It’s also, by the way, where the dealership makes the best margins of any product sold under its roof. There are apparel items and gifts for men, women and kids who may never ride a Harley their entire lives. What started out as leather jackets, then tee shirts, developed into an entire new variety of industries just to supply these motorclothes departments.

Many musical instrument retail stores today resemble the Harley dealer from 1970…there is little product in the store that will appeal to anyone beyond the musician. And the product that is there is low-margin by their own admission! The rep should share with the musical instrument dealer the things that a good Harley dealership does.

This musical instrument retailer is losing, and will continue to lose, customers in several ways if they continue just doing what they always have done by only courting musicians. Even if "musicians" is a category that grows among the population, that does not ensure this retailer's sales will grow along with it, and besides, he's leaving it to chance if or if not that category grows.

First of all, the starter musician—that 12 year old kid buying his first guitar—is likely to buy at Wal-Mart or Best Buy now. His mom is going to do the shopping and odds are she'll go the least expensive route. Or mom may buy it online, but point is, there are a lot more places to buy than there was years ago.

Another customer the dealer is losing or seeing less of is the collector. Time was that local musical instrument retailer could take in used guitars for trade and resale, and his local store was the place to look for vintage instruments. Ebay has outperformed that task. Not only that, but there may be other retailers thousands of miles away with kickass websites that compete for the same customer.

So to re-grow his customer base it makes sense for the musical instrument dealer to boutique his store with apparel, gifts, accessories and so on…to become a music related overall destination instead of just an instrument store for musicians. That girl who comes in with her rocker boyfriend and sits on a speaker cabinet filing her nails while her weekend warrior tests some new axe should be made into a customer. Offer her some cute shirts, jewelry items, whatever, but quit being a lounge for her!

Who knows? The new boutique customer just may decide to take up an instrument due to their experience in the store boutique…but they may never have visited the store to begin with had the new boutique area not been there. Or they may've come away with a negative impression like "Oh yeah the place I file my nails while Johnny Rockstar ignores me".

So get out and shop, and encourage your customers and prospects to do same. You’ll learn a lot as an independent sales rep…and you’ll be able to teach others. Ask anyone who their favorite teachers were and you’re likely to get a long list….ask anyone who their favorite salesman was and it will be a short list….