Retail Network procurement and sales training
What has changed in retail producer job for 5 recent years?
First: During these five – seven years, new class of managers – purchasing managers has been formed. Earlier, as we remember, these functions were obliged to the shop manager or department manager.
Second: These some years are characterized by immense growth of large retail chains. If five years ago, only 30% of products, produced in Russia or sold by high volume importers, were sold across retail chains, then now, its share is not less than 70% in big companies turnover. Simultaneously, dozens of shops incorporated by joint name, identity and stock open in regions.
On the one hand, active trade development plays into the hands of FMCG producers, selling across supermarkets or chain stores of products, household chemicals, building materials. However, the most part of companies, producing or selling similar products begin to have “difficulties in communication” with new market players. It’s connected with the fact that a “player” possesses a number of features, distinguishing him from typical shops, opened in the end of ninetieth.
«Supermarket chains dictate terms to us and the further in, the deeper. The main problem is – utilization of our floating assets or payment delay. It’s typically for us. The other problem – it’s very hard to sell all the stock through these market players».
Procurement departments of the chains choose particular positions of our stock. Moreover, these items are represented by them poorly" – complains the vendor of “Belgorodskiy milk” at Moscow market.
"Sometimes, supermarkets claim money for the right to be represented on their shelves.
They charge for presentations of our products in sales outlets of the chain, it’s usual for Moscow shops. For example, “Ramstor” has its firm statutory price – it’s necessary to pay symbolic N dollars for the organization of product degustation.
The price can get to N x 10 in the other shops, - one more producer opinion. Of course, it’s our fault, too. The most part of our managers don’t possess necessary negotiation skills and can’t explain to the director or manager of procurement department that co-operation is equally good for all". For managers, working as sellers, it’s easier not to look for the better way of cooperation with the buyer but make calls to the office and say: “it’s necessary to pay to the shop for the promotion. Give me some money, please”.
Instead of this, it’s necessary to teach them how to look for the chain benefit in their promotions and taste tests, motivate shop managers to agree, even be glad and get benefit from carrying out of such taste tests or presentations of producer company.
Now, it’s necessary to have flexible feature combination for every sale manager. This function involves the negotiation methods training with training to consulting services – in other words, ability to consult the clients.
As a result, more producers are keen to teach constantly their managers. It’s necessary to lead this training systematically, for example, active sales, negotiations, effective presentation, merchandising, training technology of the client during communication.
That time when ability to upsell the client simply once guaranteed stable growth of company sales volume, becomes the thing of the past and seemingly without resource. Now, approaches to education as a “wonderful story about advantages and products” have changed a lot for sales personnel.
This tendency is related mostly to producers, supplying the products to large retail chains of Russian cities with million people.
According to this year statistics, more than 50% of companies, coached their managers to sales in the mode of non-recurrent training to Psychology of Persuasion, stay unsatisfied with the results.
After such non-recurrent training, other 20% of customers come to conclusion that it’s necessary to work additionally in the sphere of personnel training especially to business experiences during this business-training course.
And, also, sales promotion devices: development of the assortment policy of products, selling across supermarkets, development of the product promotion policy in the salesroom (merchandising, point-of-purchase advertising, system of presentation and degustation), development of logistic schemes and professional choice of distribution channels. Only few Russian producers manage these instruments, affording to enhance sales volume more than 100%.
Real price and product itself are not so much important for the current chain manager as its capabilities with total characteristics. Through supermarkets and large chains can be realized not only budget-priced lamps and locks but expensive Whirlpool and exotic brushes for shutters cleaning.
Comparatively inconsiderable sales volume of expensive products is offset by significant retail margin. "I’m interested in following aspects: products should be delivered on schedule and be in fixed quantity. There shouldn’t’t be “holes” on my trade shelves. I’m interested in my products make my shop more attractive for the client. It’s important that these products shouldn’t be sustainable. It would be great if these products sold other products of neighbor shops, - says the department manager of the supermarket "Sedmoy Kontinent".
«I’m ready to buy constantly such products from the company, providing me with such capabilities. Moreover, I’m ready to guarantee an acceptable turnover for it».
In other words, if sales manager could show and explain to the buyer functioning principle of “chain products”, it would be evident and undeniable advantage for such supplier!
What’s necessary to know and understand for the salesman? Earlier, knowing about product features and elementary advertising skills were enough for him. Now, he must aware of the assortment of complementary products filling up his main product chain, know all consumption and use features of the product for the final user. He must also know excellently merchandise display and representation process on the shelves of this trade chain. Being aware of all peculiarities and tasks of the shop and trade chain, he can argument competently his ideas concerning assortment building-up on the shop-windows and chain sales floors.
Where is the advantage of product offered by this woman for the chain purchasing agent?
1. Manager, willing to increase product sales and sell the production across retail chains, must be aware of promotion tools and auxiliary services his company is ready to offer for retail chains and know all special merchandise properties in a range of similar products, its display and supply logistics.
2. Salesmanager must be enough competent for marketing shop policy integration with the chain marketing policy.
The most part of sales managers either not aware of their head position concerning the said tasks (if there is any policy in the company concerning this task), or doesn’t have enough special training skills in the sphere of marketing and logistics. This experience offers to motivate the purchasing agent for long-term cooperation.
The target is delivered by integrated program of personnel training, linked with consulting knowledge and sale work.
Shop managers advanced training in the sphere of marketing and product promotion. This work involves:
- Finding of strengths and weaknesses of goods. (What features of our product does final user buy and what features – supermarkets?
- Is our product unique during consumption by final user or claim distribution near the products of one group? Is it – an accelerator?
- There are main products and products-accelerators – it sells very slowly but enhances significantly neighbor product sales.
- Definition of consumer group.
- Client expectation models.
- Company-producer advertising strategy on point-sale.
- Definition of the best distribution channels.
- Work Strategy selection with the Chain (yourself or with distributor).
- Definition of pricing policy, bonus system, risk assessment.
- Personnel indoctrination, working with large chains and supermarkets, with designed internal policy on development and sales.
The result of this work is clear understanding of all priorities by company sales managers, ability to explain all product strengths and weaknesses to the purchasing agent and even to the seller of trade floor.
The ability to show to the purchasing agent all advantages linked not only with product price and delivery date but with additional benefit in the result of cooperation with this company, having such stock.
In the most part of Russian companies-producers, marketing department is “separated by the wall” from the main company operation. Information for agents, sellers and managers, having contact with the market, remains at the divisional level of the company and can’t reach executives, making decisions.
Logistics – main problem, jeopardizing sales result improvement. "Frequently we can’t provide necessary stock because it’s not profitable for producers to cooperate with small consignment, supplying it through small period of time. Supply schedules have been developed by suppliers on the base of large orders and the supplier has agreed to carry product lots not oftener than once a week" – complained the director of one supermarket of Yekaterinburg.
The problem becomes more complicated because of conscious absence of own warehouses by any shops – delivered products should be immediately distributed on the shelves. As the result, it’s rather hard to distribute products on the first work phase because of its abundance, on the second one – because of its temporal absence.
Creation and support of fixed assortment in every shop, new items introduction in it, “linkage” of shop interests with a producer company concerning logistic structure – one more task. If sales manager handles it, he will increase his own efficiency as a seller.
But in order to link something, it’s necessary to understand and clear it for yourself at first. It’s a problem for many sales managers. They don’t aware of necessity to understand the internal chain functioning.
The company-seller itself should have an assortment policy with disposed obviously priorities and logistic schemes, elaborated and amenable to correcting, giving supplementary priorities for the chains.
The main problem which trade chains should face - inflexibility and slowness of suppliers transport schemes and equally their warehouses work.
The main causes of it – ignorance of logistic basis and unwillingness of supplier transport department to introduce alternations in hands-on experience.
Work should be lead simultaneously in two ways – training course, development of logistic schemes and control of personnel understanding of this information (logistic tasks of the company in general).
«Personnel of the most part of logistic departments and warehouses of our company don’t want to enter into work of sales managers. They don’t realize that exceeding the delivery limit or confusing assortment, swearing during discharging, they destroy all sales manager arrangements. Therefore, they tear up foundation of sales – redemption of our vendor» - complains one of directors of the incumbent company of St. Petersburg on distribution of milk production.
One more problem lies in staff relations. Magnificent marketing strategy, schemes and solutions crash over differences of the company objects and its sales managers. They don’t understand final tasks of the own work, can’t combine the necessity of instantaneous earning and long-term strategic work, which not frequently involves actions in prejudice of own instantaneous interests.
Pekka Maremaa, director of the large joint venture, engaged in textile fabric sales in Russia, likes to repeat:
"One good contract – is a chance, two ones – result of warm work, but real win is there, where dozens of little things are formed in system". At modern market of retail chains that producer will win, who can combine many aspects: training of his own staff and personnel of other companies, logistics, marketing and management of relations with the supplier.