From national chemists and suburban salons, to online retailers and glamorous department stores, where a product is stocked is as much a part of a brand as its packaging. It comes as no surprise, then, that brands place so much emphasis on the distribution channels it decides to pursue. Here, we look at the various distribution channels and how they work.
Department stores
It goes without saying that being stocked in one of Australia’s biggest department stores places your brand in some of the country’s most coveted retail spaces. Stephen McDonald, David Jones’ general manager of merchandise, beauty, reiterates the prestige that comes with aligning yourself with a top department store: David Jones has been trading for 174 years and our brand engenders trust, quality, service, and a premium position in the Australian market.”
But while making it into a department store is certainly cause for celebration, Myer’s national cosmetics buyer Frank Kavanagh says too many brands pop the Champagne cork prematurely. We rely on suppliers and brands to drive the customers in, and we’ll take care of it from there,” says Kavanagh. We definitely work with those brands to get their sales over the minimum benchmark – we pride ourselves on developing and nurturing some brands – but at some stage we need them to stand on their own two feet.”
Both Kavanagh and McDonald agree that to make it into one of their stores, a comprehensive marketing campaign and the ability to meet demanding sales targets, is imperative – as is return on investment. The number-one factor at the moment is return on shelf space,” says Kavanagh.
According to McDonald, the brand should also have some recognition to the core customer, be a quality product and have premium packaging. The brand would also need to be able to offer a certain level of support, such as marketing, PR and training of our staff in stores,” says McDonald.
Salons
Salon-only brands are their own entity, priding themselves on a professional edge and exclusivity. Heading down the salon-only distribution path may limit a brand’s potential sales, but has the ability to put you on a professional pedestal.
We chose salon-only predominantly due to the industry feel out there between make-up artists and professional salons…it give us an edge,” says CEO Rob Tamburro. Keeping it a bit more boutique, a bit more exclusive, allows us to work with a lot of high-end brands and fashion labels.”
But of course this choice of distribution comes with its limitations – namely, financially. Sometimes you sit back and think how good it would be to be stocked in a large chain store,” says Tamburro. But you weigh that up against losing that salon business, which has built the brand up to what it is.” Tamburro also says salon stockists provide a greater level of loyalty that can be compromised with larger retailers, where new brands are always popping up.
Pharmacies
According to Todd Clarkson, business category manager for Terry White Chemists, distributing through a national pharmacy chain can offer benefits including brand exposure to all markets, as well as the ability to maximise national marketing investment. Suppliers who are looking for selective or exclusive distribution for their brand, but who also need to make sure they are getting enough reach, are able to leverage our size and significant marketing programs for mutual benefit.”
Requirements for brands to be stocked in a chain like Terry White vary depending on the category or segment. Product quality, brand positioning and strategic fit are the core pillars that form the foundation of the decision-making process,” says Clarkson. We are always looking at how much equity the brand has in the market and how that will translate to a customer purchasing the product in our particular stores.”
Clarkson says smaller brands often have the advantage of being able to focus on individual retailers and use their size to move quickly and effectively. A tailored approach can provide success for any size brand. Small brands should be looking at offering exclusivity for a period of time and really drive the brand hard,” he advises. Most small brands have limited resources and spread them too thinly trying to be everything to everyone – rather than focus all of their efforts to build their small brand into a bigger brand with one retailer.”
Online
Without facing the same retail pressure of the aforementioned distribution channels, online retailing comes at a smaller economical cost to the brand. Kate Morris, founder of e-tailer Adore Beauty, says brands can no longer afford to ignore the importance of having an online presence. I think it’s really important for brands to understand the way customers shop, and nowadays they don’t just shop in one particular location or channel.”
Leanne Faulkner, founder of Australian brand , agrees that online selling can work symbiotically with in-store retailing. Our [online] retail prices are the same as what you would get in the store – it’s not about competing with the retailer, it’s about adding value,” she explains.
Online also provides a more open (and opinionated) means for shoppers to buy, thanks to discerning customer reviews. If there are quality issues with a product or brand, they’re going to become apparent very quickly through reviews,” warns Morris. For this reason, Morris says Adore Beauty looks for high-quality products that brands can prove customers are going to be interested in. For new brands, Morris also suggests a lot of product sampling, paired with a strong marketing and PR strategy.
Reflecting on the various store, pharmacy and online distribution options that have helped Billie Goat Soap become a success, Faulkner can’t favour one over the other. I think all of them have their own benefits. All of those retailers attract customers for different reasons, and I think we’ve managed to really appeal to all of those different types of customers,” says Faulkner. And her advice to other small brands? Don’t rush into anything. Stop and think where your brand’s natural affiliation might be and pursue that first,” she advises.