The current recession puts more pressures on all retailers and adds the fear of the unknown to the already difficult trading conditions. In 2009, independents will have to use all the help they can get to maintain their trading position and convince the customers of their professionalism and ongoing knowledgeable support.
Fortunately, the power of brands is constantly growing and during the recession, for their ‘considered’ purchases, the customers are more likely to seek the products of the companies which inspire confidence in their technological excellence, after-sale service and longevity. It is not coincidental that these companies have developed loyalty programmes for their independent retail partners which are beneficial for both parties. They not only give retailers preferential terms of trading, advertising and merchandising support but help them with their professional development as retail specialists – in general and in particular product areas.
Some of these schemes have just been created, such as the Neff Accredited Appliance Retailer (AAR) scheme which commenced on 1 January 2009, while others have been running for many years, such as the Sony Associate dealership programme which has a 12 year-long record.
How to quality
“It has been an outstanding success. Sony launched the scheme to offer additional support to the consumer electronics independent dealers in the UK to enable them to operate successfully in a competitive marketplace,” says Diane Fuller, Sony’s general manager, Independent Sales. To qualify for the Sony Associate dealership programme an independent dealer has to be able to offer Sony “33% share of voice and be willing to work in partnership with the Sony brand and offer a range of products in store,” explains Diane.
Encouraged by the success of the MasterPartner loyalty scheme for Neff kitchen specialist dealers, the manufacturer decided to create a parallel scheme for the independent electrical retailers – the Neff Accredited Appliance Retailer (AAR) scheme.
However, in order to join the Neff AAR scheme independent dealers have to be invited by their Neff area business manager. Once recommended by the area business manager, the dealer’s application will be submitted to Neff sales director, Mike Jarrett for an overall decision and subsequent invitation to join. The scheme applies to all Neff appliances.
Hannah Watson, Neff brand manager, explains: “The dealer has to sign up to a number of criteria based on a proven commitment to the Neff brand and its customers. Key requirements include excellent customer service in the showroom with well presented displays of Neff appliances and Neff point of sale. Equally important is knowledgeable staff that is keen to participate in regular product training on Neff. Already supporting Neff with a steady turnover, eligible participants will be keen to grow their Neff business in 2009 with an even stronger partnership with Neff by meeting all the relevant criteria.”
Meanwhile Glen Dimplex Home Appliances Group has two loyalty schemes for independent retailers selling kitchen appliances. The first one, called the the Stoves and ACE Centre Initiative, applies to all products in the Accolade from Stoves collection of built in appliances.
The second programme – the Range Centre Initiative – comes from Belling, and focuses on encouraging sales of Kensington range cookers. It is also applicable to range cookers from the Stoves collection.
The Stoves and ACE Centre Initiative works on two levels and independents can become either Stoves Centres or ACE Centres. “By giving the scheme a two-tiered structure it meant that we could offer it to all of our independents as it caters for smaller retailers as well as more sizeable outlets,” explains Jeanette Jones, national sales controller built-in at GDHA.
To become a Stoves centre, independents need to stock from six to nine Accolade from Stoves products, and to become an ACE (Accolade Centre of Excellence) centre, they will need to stock ten or more products.
The Belling Range Centre initiative is a two-tiered scheme, meaning that independents can qualify for it in two different ways. Both tiers of the scheme ensure independents are offered Range Centre status but come with varying benefits.
To qualify for the first tier, independents must stock three incremental Stoves or Belling Kensington range cookers and they will benefit from a 5% discount. Retailers stocking six or more incremental products qualify for the second tier of the scheme and will not only become GDHA Range Centres of Excellence but will also benefit from a 10% discount.
The Sony associate dealers receive preferential terms of trading, shop fitting, accrual fund for advertising, specific point of sale material, window displays, range stocking, regular contact with area sales managers, tactical incentive schemes, dealer launches, dealer support advisors and access to a comprehensive training programme – says Dianne Fuller.
For its AAR scheme retailers, Neff offers a package of business benefits “including enhanced status on the Neff website for significant stand out value from the local competition. In addition, the dealer will be able to display the Accredited Appliance Retailer logo at point of sale and in all their promotional material. All of this will hugely benefit the dealer’s relationship with Neff in the future,” confirms Hannah Watson.
The Stoves and ACE Centre members benefit from exclusive discounts and promotional offers. They are also given product training, which can either be carried out at the GDHA training centre in Prescot, or out of hours at their individual retail outlet. In addition to the dedicated training, members of the scheme will also receive in-depth product information, specifically tailored marketing materials and merchandising support.
Members of the initiative are also automatically entered onto an exclusive listing on the Stoves and Accolade websites. When a customer is searching for a product they can also find a retailer local to them with members highlighted as approved centres.
Meanwhile, the dealers participating in Belling Range Centre initiative are offered discounts: 5% for those who stock three incremental Belling Kensington and Stoves range cookers and 10% for those stocking six or more. In addition to financial support, Range Centres also have access to exclusive marketing materials, sales tools and are able to exclusively offer customers a two year labour warranty on Stoves range cookers.
Professional knowledge is a particularly important differentiator during the recession, and the members of Range Centres, “benefit from tailored, in-depth product training – out of hours on request – which means that retailers are more knowledgeable about range cookers and are better equipped to communicate this with the customer to secure a sale,” argues Jane Rylands, Belling marketing manger.
What’s there for manufacturers?
The loyalty schemes foster a commitment to the manufacturer’s brand which is translated into greater sales, in-depth product knowledge and preferential display.
Participating retailers get better merchandising support and PoS material which create a more pleasant and professional shopping environment. “By providing better merchandising and marketing materials to members in the schemes we can also ensure that the independents’ showrooms look better and are more focused towards promoting our brands,” confirms Belling’s Jane Rylands.
“It also gives us extra confidence that consumers will have a positive experience when visiting their showrooms and this is very important to us as a brand,” adds Neff’s Hannah Watson.
Stove’s Jeanette Jones also points out another important benefit for the manufactures: “S
uch schemes also ensure our sales managers have more opportunities to meet with retailers in their areas, which in turn assists us to develop better relationships with them and understand their needs. As a result of listening to those on the front sales line, we can ensure that we tailor not only our products to meet consumers’ needs but also our training and merchandising to assist retailers where they need it the most.”
Standing out from the crowd
Manufacturers closely associated with the leading brands on the market will not only stand out from the crowd as a result of more investment in the store and more professional marketing of their business but also they will have an enhanced status in the eyes of their customers – as representatives of the leading brands.
This is particularly important during the recession when trading conditions get even tougher and the market becomes more competitive.
“The number of people looking to purchase kitchen appliances obviously declines during a recession, as consumers feel the pinch and disposable income tightens. For these reasons it is crucial for a business to make sure that they convert every possible lead into a sale, and by ensuring that retailers are fully equipped with the information and techniques that they need we can help them to succeed, “stresses Jeanette Jones at Stoves.
Financial rewards are even more important during recessionary times: “The Range Centre initiative also offers members discounts on the price they pay for our range cookers. This in turn will aid the independent dealer in a number of different ways. Primarily, it means that they will be able to make a larger profit on the products they sell or they can use the discounts to offer more competitive promotional offers without losing out on revenue.”
The final word
The manufacturers featured in this article receive a lot of positive feedback from retailers participating in their loyalty programmes. Steve Woods, manager of Built In Kitchens, who became the 200th retailer to sign up to Stoves and Ace centre scheme, commented on the merits of the scheme: “The initiative was a great opportunity to build our relationship with Stoves and expand the range of products we stock, which are very pleasing on the eye. The on-site training provided by Stoves was invaluable and has given the staff here much more confidence as they now know the products, their functionalities and the benefits of having them, and are at ease communicating this to the buyer.”