Aug 07 2017

Brands Find Innovative Ways to Partner with Brick and Mortar

As Amazon continues to flex their muscles, retailers and brands see benefit in forging alliances with physical stores.

Brands across all industries are partnering with brick and mortar shops in efforts to help them compete and outperform online giant, Amazon. Amazon has become notorious for offering brand name products intermixed with counterfeit versions in addition to employing predatory pricing strategies. Brands are also losing floor placement as shops are closing which is bad news indeed. Floor placement elevates brand awareness and legitimacy which elevates online and even direct sales. The pendulum has hit the pivot point and brands are taking a stand.

Since a surge of counterfeit products were sold on Amazon under the Birkenstock name, the famed sandal maker has taken drastic steps to partner with authorized retailers. Birkenstock announced earlier this year that it is not only discontinuing to sell to Amazon but will also not allow retailers to sell their products on or to Amazon under penalty of permanent account revocation. Birkenstock CEO, David Kahan sent a letter to Birkenstock retail partners stating, "A retailer who is not a authorized Birkenstock partner, is someone who unfortunately may not have policies and a business strategy that is consistent with ours. It is our unilateral choice to sell who we believe best helps us in our shared mission to serve the consumer. If you received this letter, then thank you, because you are one of our valued (and I do mean VALUED retail partners.)"

There will always be a need to see, feel, and try products in the marketplace. Retail is undoubtedly changing but progressive brands are meeting shoppers demands by providing options and information in a way that was not previously possible.

Aside from counterfeit merchandise, Amazon damages brand reputations in another powerful way; pricing. When premium goods are sold online at an unauthorized discount, the perceived value of the product drops. It is believed that the product is no longer the same quality or that the value is somehow otherwise diminished. The lower margins are often unsustainable for brick and mortar shops who have higher overhead costs than online merchants. This type of pricing behavior is also damaging to retailers who are then perceived as overpriced even when they are working at an already minimal margin in many cases. The trust between consumers, brands, and retailers is shattered by the perpetual race to the bottom. This is one reason that many premium brands have adopted Minimum Advertised Pricing or MAP. MAP keeps online retailers from damaging a brand's reputation and products' perceived value. For many brands, Minimum Advertised Price (MAP) is a way to help brick and mortar retailers maintain the margins that make overhead and well-trained staff sustainable.

An article in the Wall Street Journal titled "Brands Strike Back: Seven Strategies to Loosen Amazon's Grip" addresses several ways that brands are working with retailers to forge strong alliances. Partnership strategies featured in the article include in-store events, brand-created displays and merchandising, brand-supplied digital catalogs and tablets to present them to customers, selling online through Kibo (formerly Shopatron), & other technological means that are product or brand specific. Five out of seven of the brands mentioned in the Wall Street Journal article are also partnered with Locally to connect shoppers to nearby products on brand sites. A Locally partnership is not only a means to support brick and mortar retailers, though. A brand who uses the Dealer Locator and Product Locator tools on their consumer-facing brand site is offering the consumer information and options for their purchase. Brands are expanding the reasons for a consumer to commit to their products by offering to let a consumer know where they can interact with the product. There will always be a need to see, feel, and try products in the marketplace. Retail is undoubtedly changing but progressive brands are meeting shoppers demands by providing options and information in a way that was not previously possible. Locally is bridging the gap between the consumer and the products they want to try and buy.

Listen to the Wall Street Journal Podcast Here

As a brand who values brick and mortar placement, what are you doing to partner with your retailers? Follow us on Facebook and give us your story. We would love to hear your ideas.

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