Ralf Ringer: Independence - a good thing, but extremely expensive
RALF RINGER reacted to the crisis this year with a number of innovations. Already during the formation of the Autumn-Winter 2009/2010 collection, a different approach was chosen from previous years: the company abandoned risky styles and relied on styles that are in massive demand. With this step, the company decided to significantly reduce the risks of its retail partners.
The next innovation fell on the Spring-Summer 2010 collection. Starting this season, the company provided its dealers with the opportunity to place orders in a free size. With only one limitation: the order for the model must be a multiple of 12 (the number of pairs in the box). But that's not all. You can specify the delivery date for a particular style. That is, if you wish, you can order 1008 pairs of size 45 for one article on February 14 and 12 pairs of size 42 for another article on March 20. There is virtually no such service in our footwear market, and its introduction required serious efforts from the company and the allocation of additional resources. The stated goal is to support partners in a situation of decreasing demand: to avoid leftovers associated with regional specifics of the size range (for example, there are regions where the 45th size is not in demand in principle), and to increase sales of models moving from season to season, which have a number of sizes were sold "to zero" last season, and some sizes moved into the next season.
But the main innovation, which, as they say in RALF RINGER, is the result of more than one year's work, is a new sales strategy. Already in 2007, the company's specialists felt that the situation on the market was ambiguous, and realized that it was necessary to change the approach to creating, testing and selling a collection. That is, even then there was an understanding that it was necessary to change the job, but how to do it became clear only in 2009. The crisis added clarity. It was during the crisis that it became obvious that the weak point of the Russian shoe market is disunity. Retailers and suppliers often work not "at the same time", but "every man for himself", because they do not see each other as partners. The result, according to RALF RINGER, is undersale. “Our analysis shows that today's sales volume can be increased by 1,5–2 times even without additional investment in a product or promotion, only due to the level of brand awareness and customer loyalty,” comments Andrey Berezhnoy, head of the company. “But at the same time, some partners see our request to regularly provide sales reports as an encroachment on independence, a desire to 'bend' them under 'Ralph'. Independence is not a bad thing, but extremely expensive. It is because of her that both our partners and we are paying with undersales today. "
The new RALF RINGER sales strategy implements the principle of interdependence. The company is confident that it is on such a foundation that a system can be built that would guarantee everyone long-term commercial success.
The goal of the strategy is formulated very specifically: to ensure the effective functioning of 1500 format retail outlets with total sales of 2 million pairs of shoes per year. As Andrei Berezhnoy explains: “We do not want to operate in our calculations on the sales volume of shoes in pairs, we want to manage the number of formatted retail outlets. We see both the future of the brand and the guaranteed sales of our partners precisely in the format trade. The entire capital of the brand is most effectively sold precisely in format stores, and selling shoes in another way means not selling shoes and not getting profit. ”
In total, 11 of the possible RALF RINGER shoe trading formats are highlighted in the strategy. The choice of any of them implies that the partner fulfills certain obligations and guarantees the preferences specified in the strategy, for example:
- providing a significant additional discount “for the format” from the standard wholesale price;
- protection from the competitive proximity of other format and part of non-format retail outlets belonging to other partners of the company;
- advertising support for both the RALF RINGER brand and specific retail outlets of partners;
- priority shipment of additional partners' orders during the sales season;
- gratuitous provision of seasonal POS materials for the design of partner outlets and much more.
The company does not hide that it is most interested in three formats: a single-brand store, a store under the sign and Shop-in-Shop. The format “Shop under the sign” implies that the shop consists of several shopping areas, the sales area of men's shoes meets the standards of the RALF RINGER monobrand store. Other product areas may sell different products. Shop-in-Shop is “a RALF RINGER store in a multi-brand store”, the display of goods is done exclusively on proprietary trade equipment or on trade equipment agreed with the company and marked with the RALF RINGER trademark. By the way, here the company has a pleasant surprise for its partners: customers will not need to order trading equipment from their supplier. RALF RINGER prepares several design concepts (together with drawings), the customer chooses the most suitable option for himself, downloads documentation from the website, goes to any construction company in his hometown and makes his own equipment (which will be cheaper in any case than in Moscow), plus also saves on its delivery. From the central office, he receives only elements of corporate identity. The payback period of the project is one, maximum two seasons.
The company plans to stimulate the transition of dealers precisely to these formats with economic instruments; it is for the owners of stores of such formats that the most favorable conditions for cooperation are provided. But in any case, they will have a choice. Andrei Berezhnoy adds: “Any of the company's current partners, making an order for footwear of the 'Spring-Summer 2009” season, will decide for himself which form of selling RALF RINGER footwear - formatted or non-formatted, corresponds to his own goals and objectives. I emphasize: this is a free choice. If he prefers informal trading, then within one season the form of cooperation with RALF RINGER will not fundamentally change for a partner. ”
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