It's Not Just About Product!
By Corey Wolfe
When first starting in this industry more than a decade ago, most buyers were tasked with finding the best price and source for the hottest product at retail for their respective loyalty, incentive and recognition programs. Buyers sourced products directly from retail brands, retailers and rep firms.
Lack of inventory, pricing/promotional support and communication deficiencies were some of the challenges buyers faced when sourcing retail-facing brands' products. That is why true supplier/fulfillment centers were born, like Links Unlimited.
Taking on the inventory risk, brand and product asset management, and building and managing co-op programs are some of the ways true product suppliers have made the channel more productive and profitable.
Within recent years, there has been a huge spike in requests from third-party loyalty, recognition, wellness and safety platform providers, as well as the retail brands, that the Special Markets are looking for ways to make an impression on the program's target with elements around the incentive, reward or gifting product. Suppliers have now been tasked with being able to deliver more services around the program's product fulfillment. These requests, such as product feeds, kitting/bundling and product decoration, are aspects that corporations are asking their providers to include in order to enhance the target's experience.
Technology Is Key
The driving force behind all these extra service offerings is technology. EDI, XML, API or flat file product feeds are required, and IT departments are even more important than ever. A supplier must be proficient in all these different formats to meet the demands of either product sourcing or third-party platform providers. The feeds provide order management, real-time inventory and product assets, and entire work flows are dramatically improved.
Bundle It All Together
Product bundling is the combining of two or more products, which supplies a greater value to the target.
It is so much more than just the product in today's world.
Bundling has been researched for more than 40 years, and it can go by many names: gift sets, package deals, and collections, for example.
Bundling is a very effective and profitable strategy for mainly points-based programs, which allow for better margin for the reseller while delivering a unique offer to the program's target. Consumers in these programs typically compare prices (dollars to points) before deciding on a purchase—and consumers love choices because they make them feel in control.
Suppliers have been tasked more and more with finding the value-adds, and bundling seems to remedy this ask from the channel.
Decorate the Product
One of the biggest requests that corporations have asked for is supplying decorated product as an incentive or gift to their target. Mainly dealing in clean product, the premium/incentive channel has asked if a supplier can manage the decoration of a product, inventory that product and then fulfill that product when the target redeems or is awarded that product. Supplying such a service delivers an end-to-end solution where the product is being managed by the supplier for the entire process, creating less logistical mistakes and condensing the number of vendors needed to complete the decoration process.
Brands Also Need the Service Offerings
The other side to this equation is premium retail brands. A hot brand is typically only concerned with the retail marketplace and not the special markets. Often product requests are piling up, and in many cases, brands are losing sales because they are not equipped to execute a fulfillment request, they have inventory availability issues, or they do not have enough personnel to manage the abundance of requests for their product. A good supplier takes on the risk of managing inventory to manage the channel's needs, maintains a staff to educate and sell the product line, and delivers all these services to maximize the sales potential of a brand.
Beyond the Product
It is so much more than just the product in today's world. Product suppliers are being tasked to provide more services around the product itself, to ultimately deliver a better experience to the target.
Investing in the personnel, technology and infrastructure to deliver more than just great products will be paramount to the success for supplier/fulfillment centers, our customers and their customers, and to attracting more retail brands into the special markets. Competitive pricing, inventory availability, delivering product accurately and on time, and utilizing great communication will always remain the staples to success, but providing additional services around the product will be the competitive separation for long-term and prosperous business.