Technology Reshapes Retailer-Vendor Relationships

MARK HAMSTRA

KALAMAZOO, Mich. — The traditional face-to-face sales call between the product manufacturer and the retailer is being replaced by email messages, but vendors would like to see more two-way communication, according to panel at the Western Michigan University Food Marketing Conference here.

“Frequent one-to-one sales calls are getting few and far between,” said Frank DiPasquale, senior vice president, National Grocers Association, who moderated the panel and discussed data from a recent NGA survey on trade relations.

The survey revealed that 34% of independent retailers would prefer to receive new product information via email, but only 14% said that is how they most often receive such data. In addition, no independents said they would prefer to receive new-product information via postal mail, but 20% said that is how they most often receive it. Similarly, no independents said they prefer to receive new product information via phone calls, yet 5% said that is how they most often learn of new-product news.

The survey found similar disparities between the way independents receive promotional information and the way they prefer to receive it, with 39% saying they would prefer to receive promotional information from suppliers via email, vs. 20% who say that is the way they most often receive that type of information.

Marv Imus, owner of Paw Paw Shopping Center, Paw Paw, Mich., and one of the panelists at the conference, said that electronic connectivity between his store and his wholesaler, Spartan Stores, Grand Rapids, Mich., has largely eliminated the need for in-person sales calls from manufacturers.

“When we get a sales rep in the store, we've already seen the product through the pipeline from Spartan,” he said. “We know everything about the product already.”

One challenge he has faced, however, is the need to get his store personnel up to speed on using computers. Managers in some of the perishables departments, for example, often had little or no experience using computers.

“We've had to do a lot of hand-holding,” Imus said.

Alan Hartline, senior vice president of corporate merchandising, Spartan Stores, said his company has sought to take full advantage of Internet technologies, noting that Spartan has almost 4,000 planograms online that its retail customers can download.

“We've really leveraged online and ecommerce,” he said. “It's been a tremendous vehicle for us, but it's been a learning curve as we try to get people to do things electronically and move away from paper.”

Suppliers on the panel lamented the decline in one-on-one meetings, saying that email tends to be a “one-way dialogue.”

“We've got to find a way to come face to face,” said Jim Flannery, director of global customer marketing at Procter & Gamble, Cincinnati. “We can transmit as much data as we want, but we need to create a back-and-forth dialogue.”

According to the NGA survey, 23% of independent operators said sales calls could be improved by giving access to relevant product information via a website. Nearly half of the independent retailers who responded to the survey — 45% — said sales calls from manufacturers could be improved by deploying better-skilled salespeople or agents.

There is also sometimes a disconnect between young salespeople who are technologically savvy but haven't yet learned the business, and those retailers they are pitching to, who in many cases are not as fluent in their use of technology but have learned the business through years of in-store experience.

In a separate presentation earlier in the day, Caroline Cotton Nakken, president and chief executive officer, Mass Connections, Cerritos, Calif., pointed out that young consumers also are more comfortable with the technology, which is reshaping how marketing should be directed at them.

“Young consumers are spending more time online, and they are avoiding traditional ads,” she said.

She cited online communication as a key component of “buzz” marketing, where consumers recommend products they like to each other.

“Word-of-mouth is the most powerful way to convey your message,” she said.