By David Gill
With a number of recent layoffs of in-store personnel, U.S. retailers have begun to look increasingly toward outsource providers of in-store inventory services and product demonstrations.
This has provided new opportunities for in-store demonstration companies such as Market Connect Group (MCG). “Vendors are realizing that in order to ensure their product is out of the stockroom and properly displayed, it is necessary to partner with service companies,” said Chris Bagnall, president of MCG, which is a division of Randa Corp. “In conjunction with this trend, many large vendors who have a large in-house service team use our team to assist them during peak periods and major resets.”
One such peak period is the holiday season. During the 2009 holidays, MCG said it helped out Keurig, the coffeemaker manufacturer, with “thousands of hours of in-store demonstrations, and displayed and replenished inventory over tens of thousands of store visits.”
According to Lori Anderson, Keurig’s director of marketing, the vendor was happy to have MCG on its side. “Demonstration is a key way to educate the consumer on the benefits of single-cup brewing and Keurig,” Anderson said. “We also offer over 200 varieties of coffee, tea and hot cocoa in K-Cup Portion Packs from 13 gourmet brands. The demo allows consumers to see the variety offered with the Keurig system.”
Another home-furnishings vendor that benefited from these services is Revman. The company’s Tommy Hilfiger line of bedding and bath products was outgrowing its ability to keep the assortment properly stocked and displayed at one of its retail customers. When Revman needed a better and more optimized process than it was getting from another service provider, it, too, turned to MCG.
Kim Pehle, director of retail development for Revman, said the company has used MCG’s services at a number of its retail customers.
“The feedback MCG provides to us in our overall stock levels in the stores has been the key to the success of our business, as well as the presentation at retail to ensure we look the very best,” Pehle said.
The company offers three services modules. Its In-Store Merchandising provides replenishment and display products on the selling floor, along with floor resets, repackaging, product returns and maintaining planograms and fixtures. In-Store Events enables vendors to demonstrate products face to face to consumers and retailers; a company statement said MCG performed more than 15,000 store housewares demos in 2009.
The third module is Brand Ambassadors, in which MCG personnel work exclusively as extensions of a vendor’s sales team, using the company’s selling techniques and providing custom market intelligence reports and images. Of Brand Ambassadors, Pehle said, “The everyday communications, photos and feedback they provide to us on how our product is selling and merchandised at retail is particularly valuable.”
Bagnall said Brand Ambassadors accounted for 35 percent of MCG’s total service revenue last year. He added that the market for MCG’s services should continue to grow in the future. “One of the areas we see rapid growth is with companies who do not want to maintain the overhead with in-house service programs,” Bagnall said. “The advantage to companies is the ability to ramp up in peak selling periods and pull back during slow sales seasons, maximizing their ROI. This is a trend we see continuing over the next several years.”