And the Survey Says: Focus On Selling
By George Anderson
Retailers, wholesalers and CPG manufacturers in the eighties and nineties would have been better off today had they listened to the opening line of a Billy Preston classic: “Nothin’
from nothin’ leaves nothin’.”
A recent study published by the GMDC Education Foundation, sponsored by Meridian Consulting Group and Premier Greetings, concludes that retailers (and manufacturers) that tried to ‘save’ their way to profitability during those years may have succeeded in some respects but in turn may not have focused on business growth to the degree necessary.
In a released statement, Roy White, vice president, education at the GMDC Educational Foundation said the limits of improving the bottom line through various efficiency and cost-cutting initiatives has been learned.
“Many are looking to reinvent themselves to achieve growth, create differentiation and fend off competitors. These organizations are beginning to understand that in order to deliver top-line growth, they need to take a broader view of their go-to-market approach, basic capability needs and the marketplace as a whole,” he said.
The study, Jump Starting Top-Line Growth, polled senior and mid-level executives from 180 organizations in CPG and related businesses.
Sixty-seven percent of retailers/wholesalers responding to the survey said that they were looking for unit growth to be the primary driver of profits three years from now rather than cutting costs.
Sixty-two percent of retailers expect to find a means to greater profitability in the next three years through the development of new categories. Thirty-four percent see growth opportunities present in current categories. Seventy-two percent agree that to be successful, they will need to reinvent their business.
“The fact that such a high percentage of retailers are envisioning growth by developing new categories and transforming their organizations is significant in and of itself,” said Mike Shinall, CEO of Meridian Consulting Group.
This transformation has led many to question the effectiveness of established practices such as the use of category management.
“Retailers manage hundreds of categories and are eager for a broader understanding of the overall business and their shoppers," said Mr. Shinall. “This expressed need for
aisle and department intelligence reflects a growing desire among retailers to sell against consumer need states, which might be specific meal purposes, occasions or shopping
objectives, say for grooming, beauty or snack products.”
Moderator’s Comment: In general, are retailers prepared to make the changes necessary to truly reinvent their business as suggested in the results of
GMDC’s study? Are retailers and manufacturers on the same page to achieve the top-line growth that each party says it is looking for?
We found it interesting in GMDC’s study that a greater percentage of manufacturers expected to achieve top-line growth by increasing the number of channels
they sell product through rather than selling more products through current channels. –
George Anderson – Moderator