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You’re ready to grow your business…
Running a business is like running a marathon. You’ve made it through the starting gun and established your pace. You’ve developed a business plan, found and managed initial startup funding, and are producing your line. You’re forging relationships with writers, editors, and buyers. You’ve built your website and your social media presence, and you’re getting your product into your target customer’s hands.
Expanding your distribution is a natural step. Working with a major retailer (like Macy’s) can be a tremendous part of achieving that goal.
But to be successful in taking this major step, there are some key things you’ll need to know.
Understand the retailer you’re targeting. What’s their business model? Who’s the customer? What are their price points, and what value do they offer their customer? Have an understanding of the range of business models, including pricing structure, staffing requirements, and marketing needs.
You’ve got to be able to describe how your line fits with their business model, and how your products enhance their offering and their relationship with the customer. We see a lot of vendors who lack basic knowledge about the business of retail, which doesn’t set them up for success.
A retailer wants to understand the opportunity a vendor is proposing: does your product bring in a new customer, maximize an existing business, or capitalize on a new category? In turn, your ability to speak to your demand and opportunity in quantifiable terms (substantiated through sales history and market data) is necessary.
The first step is to understand your competition. A major pitfall for emerging vendors is a lack of knowledge about the competition. Who are you competing against? What are their strengths and weaknesses? What is your unique advantage? Where are your competitors in the retailer you’re targeting?
Make sure you know their distribution, how they’re merchandised, and what value your brand brings to the table for the retailer and the customer.
To be successful in the retail environment, you must be able to articulate the value and pricing equation and have a fully intelligent and realistic conversation about what the customer is willing to pay.
Know this will vary from retailer to retailer and be prepared to talk about where your product falls on the value price spectrum – and why it makes sense. Carefully target the retailers that are the best fit for your product line and your value equation.
In this industry, you have to prove to the customer every day that you deserve her dollar—consistently, every day, with every touchpoint. Remember who your customer is, and who your retail partners are.
To scale up to working with a major retailer, you’ve got to be able to show the demand for your product. A presence in smaller retailers and a solid e-commerce presence in your own right will help demonstrate your financial backing and your growth—both key elements of successfully growing your business through a major retailer partnership.
Sustainable growth is key. Filling that first big order from a major retailer can be daunting, and many emerging vendors find they have to make a big stretch in order to fulfill it. It’s great to hit that “I’ve made it!” point and get that order out the door, but it’s critical to understand that’s not the pinnacle.
The real test is how you handle the second order, and the third, and how you maintain that ability to fill orders over time. Make sure your growth is sustainable, and that you’ve got not only an in-depth understanding of what’s required to succeed in your targeted area of business, but also shore up the resources you’ll need to compete.
Through our years of working with a wide variety of retail vendors, Macy’s has found that our strongest vendor relationships are true partnerships, with ongoing collaboration and strong, constant communication.
Vendor relationships work best when everyone is equally invested in the opportunity and committed to working through challenges as they arise. We've found this to be true regardless of the size of the business. Understanding and respect for one another and for the respective businesses is key, and when that doesn't exist, the relationship is challenging to maintain.
We look for strong interpersonal communications skills in our vendors; we focus on being in tune with our customers and expect them to do the same. We also want our vendors to work closely with their merchant partners to understand the market and the customer; with the rollout and success of the My Macy’s strategy, this is more important than ever.
Collaboration is a critical success factor, as is open and honest communication. Everyone involved needs to be authentic and to really believe in their idea and their product. You've got to have a compelling story and product offering – an assortment, not a single product – to engage the merchants and build interest in your line. The first impression is critical – making a strong showing and then delivering on the initial package.
Perhaps the greatest misconception emerging vendors have coming into a major retailer is that it's easy to become a vendor and that all they need to do is make a good product and ship it and the retailer will do the rest. Most vendors are successful when they can show that demand exists for their product via an online presence or a presence in smaller retailers.
It's also necessary to have the resources (both people and financial) in place to support marketing and sales efforts in the store. To be successful, you must have the resources to support that great idea and product offering day in and day out. Aligned with the aforementioned, the vendor must be flexible and have the ability to adapt to ever-evolving merchandise strategies, which further highlights the need for strong interpersonal skills that allow the vendor to foster strong merchant relationships.
The best advice we can give potential vendors is to do your homework – learn as much as you can about the industry, your potential partners, your competition. Visit stores. Stay in touch with your target customer.
Keep a pulse on their needs. Be a good listener. Feedback is key – be as willing to listen as you are to talk. Macy’s shares our insights with our vendors every day, and it's important that everyone involved is fully engaged. Being open to that feedback and to collaboration is an important part of being a successful Macy’s vendor.
Most emerging vendors have a period of ramping up as they come into a major retailer relationship. You may not have every piece of the puzzle in place at the outset – but you must have the foundation. The rest is where the partnership and relationship building come in!
Once a potential vendor has been vetted through our process and identified as a good potential vendor, the next step is to place the product line in test doors in our network of approximately 690 stores.
Using the My Macy’s strategy of localizing the merchandise mix to fit the customer, the trifecta of the minority merchandising and vendor development team, the merchant team and the field organization work together to determine where the Macy’s customer is most appropriate based on the product offering.
The merchant team makes the offering available to planners in the identified test markets; the planners make the ultimate determination for each store, based on their market, their customer, and their merchandise mix. Once the merchandise mix and test doors are determined, we place the first order.
For many vendors, filling the first order is a major test. But the real test is what happens next – how you fill the second order and sustaining the ability to fill orders over time. It's why having the foundation in place is so important to an ongoing successful partnership.
Building and maintaining demand for your product is an ongoing effort, and requires focus, communication, and collaboration. In this industry, you have to prove to the customer every day that you deserve her dollar; you must prove your worth to her consistently. The pendulum shift in demand isn't automatic – it has to be built. And when the demand is built, it has to be met, through consistent, timely delivery of orders on an ongoing basis.Getting our vendors through these initial hurdles is the reason we created The Workshop at Macy’s. All of these elements and how to navigate them successfully are part of The Workshop at Macy’s curriculum.
All these topics and much more are covered in the Workshop, a free training course for emerging women- and minority-owned vendors. Apply today and start moving your business forward faster and stronger than before.