There are three critical underlying elements in the retail value chain that must be strong to ensure success in merchandising, marketing, and distribution. Applying understanding of these will lead to ownership of the retail value chain which WILL lead to increased revenues.

1. Being customer-centric
2. Defining what your brand promises
3. Continuing to define and refine your brand

Perhaps defining the brand happens before a retailer can truly be customer-centric. Possibly, but it’s the feedback from the customer that allows you to refine that brand messaging. If there is not a commitment to the above three items, the organizations responsible for driving business will eventually lose the loyalty and interest of their customers. Let’s discuss.

To review, merchandising defines and refines the brand and the product line, and keeps it fresh and authentic, constantly refining the messaging to ensure that a compelling offering is brought to the market. Once (hopefully) solid, the marketing people take those messages and create actionable campaigns that drive customers to the store or other point of distribution. From a distribution perspective, you need to be able to have that offering or product available wherever the customer wants to purchase it.

This is all standard in the retail world, but where things go astray is when ownership is lost in any of these steps. All too often, when the focus shifts away from the customer, one or more of the key segments of the value chain implode.

Now of course, it’s especially challenging when you don’t own the distribution side of the business, and lose the physical control of the customer touch point. Since not all retail products and brands today have full control or full ownership of the customer connection, it’s especially critical to focus on maintaining influence over the product distribution through effective merchandising.

Retailers who truly understand their customer can own the retail value chain and thus be in position for great success. Unfortunately, many retailers lose control of their value chain and don’t understand their customers enough to survive.

Without effective merchandising, things begin to fray at the edges. Products are haphazardly displayed at the stores, especially at the department stores or discounters. Sales reps on the floor cannot really answer questions well. Promotions become ineffective. The problems begin to escalate.

To avoid this, the basic questions need to be asked and answered every day:

• Who is my customer?
• What is my brand promise?
• How am I delivering my product and measuring my customers’ satisfaction?
• How am I delivering what I want to have so that I can maintain and
  hopefully grow my brand?

If you keep asking those questions, the retail value chain can stay intact and it will become easier to bring new, innovative and revenue-generating products to market.