Getting in with a major retailer - anyone here done it?
Discussion
I will try and be brief.
My wife and I run a very niche business and have done so, reasonably successfully, for the past 6-7 years - not quite a product nor a service - in between.
Around 2015, when we first started, we contacted one the biggest retailers in its market segment in Europe with what we do - straight away and to our shock, they invited us for a meeting and, us being quite green, we jumped and met them straight away without really thinking about presentation, corporate appearance, etc, etc.
Needless to say, the meeting turned in to a bit of a car crash for me - the company basically tried to ambush me by having way more people in the meeting than we were led to believe, firing questions at me left, right and centre, and it turned in to more of an interrogation rather than a meeting. They kept in touch after the meeting, but it became apparent that they were attempting to data-mine me, so my wife and I decided to break off from communications and told them that we were 'going our own way'. Said company tried to implement what we do with the little information that they garnered, but failed.
As a guide, if the company had implemented our service/product, we calculated that it would have generated a profit of around £20-30million per year based on very conservative sales and initial, one-off capital outlay of around £5-6 million. Those figures would have risen expotentially as they would have had the market sewn up for that product/service.
2 years later, we contacted the aforementioned company as we had developed our business further and the potential for it was plain for us to see. They again invited us for meetings, but again, it became apparent that they were attempting to get info on how we did it, so we parted ways again.
Has anyone had a similar experience or has someone here been successful in getting their product in front of the right person at a major corporation and , if so, how did you handle it?
Thanks in advance and apologies if I'm a bit opaque with what we do.
My wife and I run a very niche business and have done so, reasonably successfully, for the past 6-7 years - not quite a product nor a service - in between.
Around 2015, when we first started, we contacted one the biggest retailers in its market segment in Europe with what we do - straight away and to our shock, they invited us for a meeting and, us being quite green, we jumped and met them straight away without really thinking about presentation, corporate appearance, etc, etc.
Needless to say, the meeting turned in to a bit of a car crash for me - the company basically tried to ambush me by having way more people in the meeting than we were led to believe, firing questions at me left, right and centre, and it turned in to more of an interrogation rather than a meeting. They kept in touch after the meeting, but it became apparent that they were attempting to data-mine me, so my wife and I decided to break off from communications and told them that we were 'going our own way'. Said company tried to implement what we do with the little information that they garnered, but failed.
As a guide, if the company had implemented our service/product, we calculated that it would have generated a profit of around £20-30million per year based on very conservative sales and initial, one-off capital outlay of around £5-6 million. Those figures would have risen expotentially as they would have had the market sewn up for that product/service.
2 years later, we contacted the aforementioned company as we had developed our business further and the potential for it was plain for us to see. They again invited us for meetings, but again, it became apparent that they were attempting to get info on how we did it, so we parted ways again.
Has anyone had a similar experience or has someone here been successful in getting their product in front of the right person at a major corporation and , if so, how did you handle it?
Thanks in advance and apologies if I'm a bit opaque with what we do.
Simpo Two said:
I don't know what you do but could you retail it yourself using the internetty thing and pocket the £20M (or some of it)?
We already have done so within a niche segment of that market - it's done very well but as it's a niche segment, it has a limited audience. One of the biggest manufacturers (supplier to the retailers that we're trying to get in to) has seen what we do and is now trying to muscle in on it. Although cheaper, they are limited in what they can do and so we're able to stay ahead in that segment.We know that any major retailer that takes this on would be quids in, but the experience I had with the one retailer that we got a meeting with, wasn't pleasant and stunk of a big fish attempting to devour the little fish without paying for the meal...
The big retailers already have the audience and we know from our somewhat small customer base, that it's something that has been received with a 'scream out loud with excitement' reaction, if that makes sense.
Edited by HolyMoly on Saturday 14th May 13:25
HolyMoly said:
The big retailers already have the audience and we know from our somewhat small customer base, that it's something that has been received with a 'scream out loud with excitement' reaction, if that makes sense.
It does. Perhaps social media is the answer. Sing a song badly in a funny high voice, and the next minute you'll be on national news and tipped for second place at Eurovision...!Edited by Simpo Two on Saturday 14th May 20:01
sounds like a candidate for dragons den?
what is it you do - or is it top secret.
I'd probably try and get an investor into your business, the good ones ( will have you for breakfast) but they'll have the contacts and know how to get you in front of the right people while protecting your IP, because that's what s/he has bought.
what is it you do - or is it top secret.
I'd probably try and get an investor into your business, the good ones ( will have you for breakfast) but they'll have the contacts and know how to get you in front of the right people while protecting your IP, because that's what s/he has bought.
Gilmore said:
Sounds to me like you’re having the wrong conversations.
I’d be asking them if they’re interested in buying you.
This.I’d be asking them if they’re interested in buying you.
A major retailer will always, if they think they can, try and take your idea for free and do it themselves.
I would be open with them. Set the terms (and audience) for the discussion.
Be frank that they could do this themselves, but point out the benefits of you doing it.
Also, speak to more than one retailer.
it would help to know what sort of business you are in.
Gilmore said:
Sounds to me like you’re having the wrong conversations.
I’d be asking them if they’re interested in buying you.
This was the situation with my m-i-l & f-i-ls business. For several years one of the biggest in their industry tried to compete with them, the size difference was ridiculous, them a few million a year the big boys 100's of millions. But they held them off for so long having cornered a fair chunk of the UK market. In the end it they just made them a silly offer to sell to them which they eventually did and retired at 50 very, very comfortably.I’d be asking them if they’re interested in buying you.
Dynion Araf Uchaf said:
what is it you do - or is it top secret.
I'd probably try and get an investor into your business, the good ones ( will have you for breakfast) but they'll have the contacts and know how to get you in front of the right people while protecting your IP, because that's what s/he has bought.
Prefer not to disclose what I do - apologies if that comes across as a tad rude, but it's so specific that if I did say, it wouldn't be hard to find out exactly what I do/my business.I'd probably try and get an investor into your business, the good ones ( will have you for breakfast) but they'll have the contacts and know how to get you in front of the right people while protecting your IP, because that's what s/he has bought.
We have considered contacting an investor/business angel but we have been stung very, very badly with a previous business (someone masqueraded as a potential investor who turned out to be the father of the head Buyer at the now-defunct UK's biggest department store - very shortly after our meetings, our concept was in the stores at less than half the price - pretty much destroyed our previous business)
Muzzer79 said:
This.
A major retailer will always, if they think they can, try and take your idea for free and do it themselves.
I would be open with them. Set the terms (and audience) for the discussion.
Be frank that they could do this themselves, but point out the benefits of you doing it.
Also, speak to more than one retailer.
it would help to know what sort of business you are in.
The retailer that I did have meeting with did try and do it themselves and failed miserably, which was so frustrating as I couldn't understand their long-pockets-short-arms approach.A major retailer will always, if they think they can, try and take your idea for free and do it themselves.
I would be open with them. Set the terms (and audience) for the discussion.
Be frank that they could do this themselves, but point out the benefits of you doing it.
Also, speak to more than one retailer.
it would help to know what sort of business you are in.
21TonyK said:
This was the situation with my m-i-l & f-i-ls business. For several years one of the biggest in their industry tried to compete with them, the size difference was ridiculous, them a few million a year the big boys 100's of millions. But they held them off for so long having cornered a fair chunk of the UK market. In the end it they just made them a silly offer to sell to them which they eventually did and retired at 50 very, very comfortably.
We were hoping this was going to happen to us in 2020 - sales had rocketed by 40% on the previous year and was looking to be a real breakthrough year, but then Covid hit........Oh, many thanks for the input guys - really appreciate it.
InformationSuperHighway said:
I'm sorry this isn't meant to come across as rude, however you do sound rather secretive and defensive (to us as well as the folks you're talking to).
No, not at all - in some ways, I understand where you're coming from, but my quest is to try and find advice on how to get in with a large retailer. What I don't want is for this to become a Daragon's Den-type critique of my business if I disclose what I do. I know what I do works and I know that if it was made available to the target audience at large, it would be very, very lucrative - not just for the UK, but worldwide. It's just getting it to the target audience that's my problem....It sounds to me that you would have a limited shelf life with any retailer you jump on board with. If a retailer wants to copy you and really thinks it will make them money, they will invest in getting the right people in to make it work for them.
Unless you have something unique that only your company can do then I would try and stay away from the big retailers. If you get into one of the big retailers and they make it work, their competitors will notice and then start to replicate what they are doing. You wouldn't get a slice of that pie with the competing retailer because if it was me you are dealing with I would only work with you if you were exclusive to me.
I'm a procurement manager if that helps.
Unless you have something unique that only your company can do then I would try and stay away from the big retailers. If you get into one of the big retailers and they make it work, their competitors will notice and then start to replicate what they are doing. You wouldn't get a slice of that pie with the competing retailer because if it was me you are dealing with I would only work with you if you were exclusive to me.
I'm a procurement manager if that helps.
Why did you bother going back to the same company ..
All seems a bit strange and to be honest its not something thats easy to comment on unless there is detail on what this product/ service is.
If your product/ service is already out there in the market then whats to stop the large retailer copying it? Do you have a brand and is it now recognised in this market?
All seems a bit strange and to be honest its not something thats easy to comment on unless there is detail on what this product/ service is.
If your product/ service is already out there in the market then whats to stop the large retailer copying it? Do you have a brand and is it now recognised in this market?
It's a bit hard to advise without knowing the specifics of the business but in general terms I'd say that unless you have something that you can very easily protect (and forgive me if I've misunderstood but it doesn't sound that way) then you should stay away from the big retailers.
Can you tell us which demographic your target market is without giving too much away? I'd probably be focusing a lot on accessing them directly, it might be worth employing a performance marketing specialist if it is something that would respond to online marketing/advertising. You could do it yourself but unless you have experience in the area it's likely to be a false economy.
Can you tell us which demographic your target market is without giving too much away? I'd probably be focusing a lot on accessing them directly, it might be worth employing a performance marketing specialist if it is something that would respond to online marketing/advertising. You could do it yourself but unless you have experience in the area it's likely to be a false economy.
HolyMoly said:
InformationSuperHighway said:
I'm sorry this isn't meant to come across as rude, however you do sound rather secretive and defensive (to us as well as the folks you're talking to).
No, not at all - in some ways, I understand where you're coming from, but my quest is to try and find advice on how to get in with a large retailer. What I don't want is for this to become a Daragon's Den-type critique of my business if I disclose what I do. I know what I do works and I know that if it was made available to the target audience at large, it would be very, very lucrative - not just for the UK, but worldwide. It's just getting it to the target audience that's my problem....
In very round terms, you need to be offering something they can't replicate themselves, in a way that will make them money and - importantly - will allow them to maintain the customer relationship and - just as importantly - give them a competitive advantage.
Without knowing precisely what you do / offer, it is hard, but consider things like:
- every sq ft of store space needs to generate £ of margin per year - does your idea need real estate;
- is it an up-sell / cross-sale from something else, or a whole new revenue stream? Will it bring customers through the door, or merely allow the retailer to sell more to the customer they already have?
- is there a continuing customer relationship post-sale that can unlock potential for further revenues?
- if they can copy it, so can their competitiors (just look at M&S caterpillar cakes...) - so why should they invest?
- for simple product they buy in at wholesale, they'll be looking for a markup that may be a lot higher than you'd imagined, meaning you can't deliver the product / service at a profit, or the price will drift too high
- many products they buy will contain "contribution to markdown" provisions - if they have to discount it to shift it, the vendor refunds them some of the price - does your idea carry a greater risk profile than that for them?
- is there a risk of non-performance post-sale?
- who will pick up liability / aftersales?
If you have a profitable business, and want to grow it, getting on board with a major retailer might boost your volumes but quite probably not boost your profits - they'll want so much margin that you need to be *very* sure their extended reach will make up for your loss of margin. Would it be cheaper just to advertise more widely yourself? Can you get a 10x or 100x bump in sales from the proposed relationship? If not, don't bother.
They will be ruthless about dropping stuff that doesn't perform. So if you gear up to supply them / service them, or do a lot of up-front work to develop the idea for them (and take the costs of that yourself), if they drop you ofter 6 months then you may end up in a far worse position than before. Do you have backing to cover that?
Major retailers are usually looking for:
- product that "sells itself" (great design, great price, great brand - at least 2 of those);
- marketing / advertising support from the vendor (you);
- very long payment terms (hurts your cashflow);
If buying a concept, they want exclusivity, control and/or protect-ability. Can you offer that?
If you can't protect your idea, instead you need traction - first-mover advantage, massive growth in customer numbers, and further inherent un-met demand amongst a customer group who *want* to buy from a major retailer, etc.
You may not be giving us enough to go on, but it sounds like you have something that you know would - if implemented properly - make a lot of money for a major retailer able to execute strongly and quickly. But that's an idea, not a protectable product. It sounds like you don't have a recognisable brand with major value, you don't have much in the way of IP, and you're not necessarily able to deliver a turn-key at-scale back-end solution to a retailer.
Sad to say, your best bet is probably to get them to hire you to implement the idea for them. But if you don't have major retailer experience, they probably won't hire you (not a "safe pair of hands"). So what are you left with?
I know this isn't what you want to hear. But major retailers don't usually just buy up "good ideas" and nor do they trust significant amounts of money and risk to people with no track record in their space (as opposed to your own niche).
In your attempts so far, who would be taking the financial risk? Them, or you? If them, why should they give you profits if it goes well?
A really good example of how to make this sort of sale - the dunnhumby Tesco Clubcard scheme. dunnhumby had "secret sauce" - an understanding of data analytics, and home-grown models demonstrably good at predicting and influencing consumer behaviour. Tesco couldn't replicate that quickly, so instead they contracted with dunnhumby to run the Clubcard data science piece. Clubcard launched in 1995, by 2011, Tesco had bought the whole dunnhumby business.
Do you have any "secret sauce" that can't easily be replicated? Can you deliver customer data, insight, etc that a retailer couldn't do themselves? Can you demonstrate strong up-sell / cross-sale potential using that secret sauce and your idea to drive consequential revenue? Are you willing to be exclusive for a major, sell them a stake in your business, etc.?
Another example of that - Stuffstr, a fashion resale / circular economy app, whose real value was the customer data for big brands (not retailers). They successfully sold themselves to Adidas. Why? Because Adidas want to boost their D2C channel, but their wholesale customers won't share customer data. By offering Adidas owners the chance to trade-in old trainers for new, they get not only a referral sale, but also access to the customer data - who they are, what they've bought in the past, contact details, etc. Just like dunnhumby all those years ago, Stuffstr could give Adidas insight they didn't already have, and couldn't immediately gain by other means - the "secret sauce."
Or is the "secret sauce" you? In which case what are you worth to them?
The most important part of any sales relationship is understanding where the value is, what you're actually selling, what the customer will actually buy. Just because you have an idea, doesn't mean the retailer sees value in buying your idea. But they might buy you, or your secret sauce, or the potential to unlock lots of incremental revenue and/or customer insight down the road.
There is another option - what some have called "ultrapreneuring" where you aggressively target growth in a sector with a clear idea *at the start* of who you're going to sell out to. If you can build a business plan - and an investable team - then you might be able to go that route - go really hard at boosting sales and gross margin (but never mind the bottom line) with investment cash, profiling the business to be attractive to your target retailer after, say, 3 years (basically offering them the chance to buy a revenue stream, with the profit being brought by their ability to reduce marketing spend by selling to their existing customers). But that requires a lot of investment and risk appetite - you could lose the lot.
If any of the above kicks off more questions, I'm happy to talk offline under NDA. I've got no skin in the game here - I don't work for a major retailer, I don't sell anything that sounds like it is in your area. But equally I'm very busy and not pushy about talking to you
One last thought - if all you want is the major retailers' customers as introductions, consider looking at co-promotion opportunities, performance marketing, and so on. Most major retailers are looking to expand the idea of their brand as a "platform" at the moment - they offer your product / service in return for a big chunk of the sales. You'd need the strength to fulfil, but it might be a route to consider.
skwdenyer said:
OK, I sell to major retailers in the UK, Europe and the USA. This post is in great haste - apologies if it is a touch jumbled as a result, as I don't have time to do more than throw thoughts down
In very round terms, you need to be offering something they can't replicate themselves, in a way that will make them money and - importantly - will allow them to maintain the customer relationship and - just as importantly - give them a competitive advantage.
Without knowing precisely what you do / offer, it is hard, but consider things like:
- every sq ft of store space needs to generate of margin per year - does your idea need real estate;
- is it an up-sell / cross-sale from something else, or a whole new revenue stream? Will it bring customers through the door, or merely allow the retailer to sell more to the customer they already have?
- is there a continuing customer relationship post-sale that can unlock potential for further revenues?
- if they can copy it, so can their competitiors (just look at M&S caterpillar cakes...) - so why should they invest?
- for simple product they buy in at wholesale, they'll be looking for a markup that may be a lot higher than you'd imagined, meaning you can't deliver the product / service at a profit, or the price will drift too high
- many products they buy will contain "contribution to markdown" provisions - if they have to discount it to shift it, the vendor refunds them some of the price - does your idea carry a greater risk profile than that for them?
- is there a risk of non-performance post-sale?
- who will pick up liability / aftersales?
If you have a profitable business, and want to grow it, getting on board with a major retailer might boost your volumes but quite probably not boost your profits - they'll want so much margin that you need to be *very* sure their extended reach will make up for your loss of margin. Would it be cheaper just to advertise more widely yourself? Can you get a 10x or 100x bump in sales from the proposed relationship? If not, don't bother.
They will be ruthless about dropping stuff that doesn't perform. So if you gear up to supply them / service them, or do a lot of up-front work to develop the idea for them (and take the costs of that yourself), if they drop you ofter 6 months then you may end up in a far worse position than before. Do you have backing to cover that?
Major retailers are usually looking for:
- product that "sells itself" (great design, great price, great brand - at least 2 of those);
- marketing / advertising support from the vendor (you);
- very long payment terms (hurts your cashflow);
If buying a concept, they want exclusivity, control and/or protect-ability. Can you offer that?
If you can't protect your idea, instead you need traction - first-mover advantage, massive growth in customer numbers, and further inherent un-met demand amongst a customer group who *want* to buy from a major retailer, etc.
You may not be giving us enough to go on, but it sounds like you have something that you know would - if implemented properly - make a lot of money for a major retailer able to execute strongly and quickly. But that's an idea, not a protectable product. It sounds like you don't have a recognisable brand with major value, you don't have much in the way of IP, and you're not necessarily able to deliver a turn-key at-scale back-end solution to a retailer.
Sad to say, your best bet is probably to get them to hire you to implement the idea for them. But if you don't have major retailer experience, they probably won't hire you (not a "safe pair of hands"). So what are you left with?
I know this isn't what you want to hear. But major retailers don't usually just buy up "good ideas" and nor do they trust significant amounts of money and risk to people with no track record in their space (as opposed to your own niche).
In your attempts so far, who would be taking the financial risk? Them, or you? If them, why should they give you profits if it goes well?
A really good example of how to make this sort of sale - the dunnhumby Tesco Clubcard scheme. dunnhumby had "secret sauce" - an understanding of data analytics, and home-grown models demonstrably good at predicting and influencing consumer behaviour. Tesco couldn't replicate that quickly, so instead they contracted with dunnhumby to run the Clubcard data science piece. Clubcard launched in 1995, by 2011, Tesco had bought the whole dunnhumby business.
Do you have any "secret sauce" that can't easily be replicated? Can you deliver customer data, insight, etc that a retailer couldn't do themselves? Can you demonstrate strong up-sell / cross-sale potential using that secret sauce and your idea to drive consequential revenue? Are you willing to be exclusive for a major, sell them a stake in your business, etc.?
Another example of that - Stuffstr, a fashion resale / circular economy app, whose real value was the customer data for big brands (not retailers). They successfully sold themselves to Adidas. Why? Because Adidas want to boost their D2C channel, but their wholesale customers won't share customer data. By offering Adidas owners the chance to trade-in old trainers for new, they get not only a referral sale, but also access to the customer data - who they are, what they've bought in the past, contact details, etc. Just like dunnhumby all those years ago, Stuffstr could give Adidas insight they didn't already have, and couldn't immediately gain by other means - the "secret sauce."
Or is the "secret sauce" you? In which case what are you worth to them?
The most important part of any sales relationship is understanding where the value is, what you're actually selling, what the customer will actually buy. Just because you have an idea, doesn't mean the retailer sees value in buying your idea. But they might buy you, or your secret sauce, or the potential to unlock lots of incremental revenue and/or customer insight down the road.
There is another option - what some have called "ultrapreneuring" where you aggressively target growth in a sector with a clear idea *at the start* of who you're going to sell out to. If you can build a business plan - and an investable team - then you might be able to go that route - go really hard at boosting sales and gross margin (but never mind the bottom line) with investment cash, profiling the business to be attractive to your target retailer after, say, 3 years (basically offering them the chance to buy a revenue stream, with the profit being brought by their ability to reduce marketing spend by selling to their existing customers). But that requires a lot of investment and risk appetite - you could lose the lot.
If any of the above kicks off more questions, I'm happy to talk offline under NDA. I've got no skin in the game here - I don't work for a major retailer, I don't sell anything that sounds like it is in your area. But equally I'm very busy and not pushy about talking to you
One last thought - if all you want is the major retailers' customers as introductions, consider looking at co-promotion opportunities, performance marketing, and so on. Most major retailers are looking to expand the idea of their brand as a "platform" at the moment - they offer your product / service in return for a big chunk of the sales. You'd need the strength to fulfil, but it might be a route to consider.
Many thanks for this skwdenyer - this is very sobering for me and has given a me a huge dose of reality. Too much to respond to in detail, but many of your points are issues that I am aware of but was probably not willing to accept - I have to admit that although my business has huge potential, it has very little intrinsic value as it is. I think the meeting with the large retailer that I did have has actually done me more harm than good - instead of developing my business and adding real value to it, I am pinning my hopes on 'potential'.In very round terms, you need to be offering something they can't replicate themselves, in a way that will make them money and - importantly - will allow them to maintain the customer relationship and - just as importantly - give them a competitive advantage.
Without knowing precisely what you do / offer, it is hard, but consider things like:
- every sq ft of store space needs to generate of margin per year - does your idea need real estate;
- is it an up-sell / cross-sale from something else, or a whole new revenue stream? Will it bring customers through the door, or merely allow the retailer to sell more to the customer they already have?
- is there a continuing customer relationship post-sale that can unlock potential for further revenues?
- if they can copy it, so can their competitiors (just look at M&S caterpillar cakes...) - so why should they invest?
- for simple product they buy in at wholesale, they'll be looking for a markup that may be a lot higher than you'd imagined, meaning you can't deliver the product / service at a profit, or the price will drift too high
- many products they buy will contain "contribution to markdown" provisions - if they have to discount it to shift it, the vendor refunds them some of the price - does your idea carry a greater risk profile than that for them?
- is there a risk of non-performance post-sale?
- who will pick up liability / aftersales?
If you have a profitable business, and want to grow it, getting on board with a major retailer might boost your volumes but quite probably not boost your profits - they'll want so much margin that you need to be *very* sure their extended reach will make up for your loss of margin. Would it be cheaper just to advertise more widely yourself? Can you get a 10x or 100x bump in sales from the proposed relationship? If not, don't bother.
They will be ruthless about dropping stuff that doesn't perform. So if you gear up to supply them / service them, or do a lot of up-front work to develop the idea for them (and take the costs of that yourself), if they drop you ofter 6 months then you may end up in a far worse position than before. Do you have backing to cover that?
Major retailers are usually looking for:
- product that "sells itself" (great design, great price, great brand - at least 2 of those);
- marketing / advertising support from the vendor (you);
- very long payment terms (hurts your cashflow);
If buying a concept, they want exclusivity, control and/or protect-ability. Can you offer that?
If you can't protect your idea, instead you need traction - first-mover advantage, massive growth in customer numbers, and further inherent un-met demand amongst a customer group who *want* to buy from a major retailer, etc.
You may not be giving us enough to go on, but it sounds like you have something that you know would - if implemented properly - make a lot of money for a major retailer able to execute strongly and quickly. But that's an idea, not a protectable product. It sounds like you don't have a recognisable brand with major value, you don't have much in the way of IP, and you're not necessarily able to deliver a turn-key at-scale back-end solution to a retailer.
Sad to say, your best bet is probably to get them to hire you to implement the idea for them. But if you don't have major retailer experience, they probably won't hire you (not a "safe pair of hands"). So what are you left with?
I know this isn't what you want to hear. But major retailers don't usually just buy up "good ideas" and nor do they trust significant amounts of money and risk to people with no track record in their space (as opposed to your own niche).
In your attempts so far, who would be taking the financial risk? Them, or you? If them, why should they give you profits if it goes well?
A really good example of how to make this sort of sale - the dunnhumby Tesco Clubcard scheme. dunnhumby had "secret sauce" - an understanding of data analytics, and home-grown models demonstrably good at predicting and influencing consumer behaviour. Tesco couldn't replicate that quickly, so instead they contracted with dunnhumby to run the Clubcard data science piece. Clubcard launched in 1995, by 2011, Tesco had bought the whole dunnhumby business.
Do you have any "secret sauce" that can't easily be replicated? Can you deliver customer data, insight, etc that a retailer couldn't do themselves? Can you demonstrate strong up-sell / cross-sale potential using that secret sauce and your idea to drive consequential revenue? Are you willing to be exclusive for a major, sell them a stake in your business, etc.?
Another example of that - Stuffstr, a fashion resale / circular economy app, whose real value was the customer data for big brands (not retailers). They successfully sold themselves to Adidas. Why? Because Adidas want to boost their D2C channel, but their wholesale customers won't share customer data. By offering Adidas owners the chance to trade-in old trainers for new, they get not only a referral sale, but also access to the customer data - who they are, what they've bought in the past, contact details, etc. Just like dunnhumby all those years ago, Stuffstr could give Adidas insight they didn't already have, and couldn't immediately gain by other means - the "secret sauce."
Or is the "secret sauce" you? In which case what are you worth to them?
The most important part of any sales relationship is understanding where the value is, what you're actually selling, what the customer will actually buy. Just because you have an idea, doesn't mean the retailer sees value in buying your idea. But they might buy you, or your secret sauce, or the potential to unlock lots of incremental revenue and/or customer insight down the road.
There is another option - what some have called "ultrapreneuring" where you aggressively target growth in a sector with a clear idea *at the start* of who you're going to sell out to. If you can build a business plan - and an investable team - then you might be able to go that route - go really hard at boosting sales and gross margin (but never mind the bottom line) with investment cash, profiling the business to be attractive to your target retailer after, say, 3 years (basically offering them the chance to buy a revenue stream, with the profit being brought by their ability to reduce marketing spend by selling to their existing customers). But that requires a lot of investment and risk appetite - you could lose the lot.
If any of the above kicks off more questions, I'm happy to talk offline under NDA. I've got no skin in the game here - I don't work for a major retailer, I don't sell anything that sounds like it is in your area. But equally I'm very busy and not pushy about talking to you
One last thought - if all you want is the major retailers' customers as introductions, consider looking at co-promotion opportunities, performance marketing, and so on. Most major retailers are looking to expand the idea of their brand as a "platform" at the moment - they offer your product / service in return for a big chunk of the sales. You'd need the strength to fulfil, but it might be a route to consider.
I am going back to my original business plan which was pushed to the wayside and will try and keep this updated.
gotoPzero said:
Is this high street retail i.e in physical stores?
Or is it more online?
Both - it's more geared toward being in physical stores as it's an impulse, value-added service that's low-cost, but big on impact.Or is it more online?
From what you are saying I would avoid the big boys. I think you need to aim your idea at mid range retailer, who £20M extra will make a difference too and also they might be feeling the pinch a bit more with cost of living so would want to bring more money in.
So for example say the market is food retail then I would avoid Tesco but perhaps try and talk to Co-Op or M&S. Thats just my 2ps worth.
So for example say the market is food retail then I would avoid Tesco but perhaps try and talk to Co-Op or M&S. Thats just my 2ps worth.
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