The Covid-19 pandemic has all but ruled out trade events in the wholesale sector, eliminating an excellent source of sales and revenue generation. In partnership with RNF, David Gilroy investigates whether it’s possible to operate virtual events and achieve the same or better commercial results.
It’s all about relationships
Relationships are what separate the retail sector from the wholesaler sector. Notwithstanding the requirement to operate continually at a high level across all disciplines such as logistics and inventory management, B2B selling is all about gaining trust through relationships – and they can make a substantial difference to the level of business between the operators and their customers.
Everyone loves a good trade event!
The ultimate expression of wholesale relationships is the trade event. This most exciting of happenings is much enjoyed by all parties. Nothing beats a good trade event: the buying & selling, the marketplace atmosphere, the banter, the sheer volume of people, the pallets of fast-moving stock and deals being done.
It is an adrenalin rush of commercial activity. Good effective trade events take a lot of careful planning and co-ordination. From preparing the venue, setting up the product selection, pricing and inventory (the offering) through to the outbound marketing, tastings, demonstrations, pre-sells and ensuring that the staffing is ready to cope with the massive increase in business.
But are they worth the effort?
How are trade events evaluated and apart from the fun are they worth all the effort? A good trade event links the wholesaler’s customers directly to the suppliers in a permissive setting. In so doing an event drives the sales of the participating brand owners, raising product profile and cementing traction. Key is the ability for suppliers to directly message the purchasing decision-makers and reinforce the credibility of their brands.
Suppliers can expect to see their market share increase both during the trade event and in the months following. For the wholesaler the telling metrics are: sales values, customers numbers, reactivated customers, purchase numbers, transaction values and cash gross margin. The figures should be measured across a minimum of a three-week timeline taking into account the week’s prior to and after the trade event to determine whether or not cannibalisation has occurred across the business from other weeks. For the wholesaler the trade event must be at least self-financing. Therefore during the planning stage it is vital to set down supplier revenue targets and to make these a key component of the trade day negotiations. Wholesalers regularly collect substantial trade event supplier revenues, which more than cover the cost of setting up and running the event. These revenues in addition to the sales, profit and goodwill generated across the three weeks make trade events commercially attractive. Ask most people in the trade and they will tell you that trade events are well worth the all the work involved. Then came the Covid-19 pandemic and that put paid to any mass gathering of so many bodies into one small space. Game over – no way.
Can a virtual trade event (VTE) replace a physical event?
Is it possible to run a viable trade event without the buzz of people doing business
together in person? Let’s look into the virtual trade event (VTE) machine and break down the components. The first stage on the lead up to the VTE is to message the customer base to trigger more app downloads and so optimise the audience.
The VTE promotional content
A VTE can handle any kind of promotional configuration from multi-buys, added values, bundle deals to BOGOFs. The supplier can select the type of messaging they require be it a still image, a short video or by using an AI setting the product in context and showing a demonstration. Also, the organisers can electronically limit the number of deals available thus controlling promotional investment and the available inventory. Maximum purchase quantities can also be controlled in this way so avoiding conflict in depot on the day. The duration of the trade event can be any length required by the wholesaler from a few hours only to (say) a week.
The communication set up
A physical trade event requires weeks of preparation to properly co-ordinate the deals with the brochure or flyer production and the distribution mailing plan. This takes careful planning and any changes to product or price will be messy once the print run is completed. Also, this is a costly and time-consuming process. Whereas the VTE is set up days ahead of launch with all outbound communications being electronic – last minute changes can be accommodated. And competitors have no line of sight of the deals ahead of time therefore reducing their ability to respond with spoilers.
The marketing campaign
The VTE electronic marketing campaign begins with pre-launch teasers, which are sent to customers to whet appetite and set the scene for the event. These messages can be targeted to specific segments of the customer file such as lapsed or purchasers out of pattern. Emails, text messages or push notifications can be spaced by hours, day or minutes and can be varied in content and visual impact according to the needs of the promotions.
The VTE eliminates many of the set up and operational costs of a physical trade event. With all the transactions enacted electronically the volume hit on the car park, the premises, the stock (damages) and the checkouts is manageable without an increase in manpower. The flow of order fulfilment is well controlled and customer service is better all round. The cost of preparing the depot for a big influx of customers in a short period is avoided. The expense of hiring a special location (if required) to host the event is unnecessary. In short the overheads and costs are better managed.
Excitement and razzmatazz
The VTE can deliver the excitement of a physical trade event in a different way. For example test & try options can be marketed through electronic vouchering or posted out to customers on application. Spot competitions run at various times during the campaign to encourage repeat participation. Post event incentives can be delivered electronically to ensure repeat purchasing.
Post VTE analysis
The VTE offers a feedback loop through analytical metrics within hours of the close of the campaign. The metrics can be segmented in many different ways to provide an objective 360˚ appraisal of the VTE. Suppliers are always keen to understand the return on their investment and this offers a great way to gain confidence and buy-in for future events. In addition, the wholesaler has the option to include an electronic survey to secure feedback from the customers thus enabling adjustments for next time.
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The VTE is flexible in its promotional and marketing possibilities enabling the wholesaler to build and sell a monetised rate card to the suppliers. For example, this can be a straightforward charge for a number of advertising spots during the campaign. Or it could be multi-layered based on the content type of the advertising be it pack shots, videos or AI contextual product placing. Activity such as vouchering or competitions could be priced separately. The gearing across the range of options is high and the potential to drive revenue is great.
The excitement and atmosphere of a trade day is unique and special. However, in these Covid-19 times such an event is not possible. The evidence suggests that a virtual trade event (VTE) can offer wholesalers an excellent option to enjoy the benefits of a trade event with the added value of tight controls, cost savings and revenue generation to make a significant contribution to the bottom line and sustained sales growth.