The journey of a piece of tech from the production line to store shelves is at the very heart of the Channel. Jonathan Easton speaks to Paul Routledge, country manager at D-Link UK, to get to grips with exactly how a product gets to market and what the vendor’s relationship with the Channel is.
How do you forge and maintain relationships with distributors?
We are in a very lucky position in that we have four great distributors – Ingram Micro, Exertis, Techdata and Entatech – and we have long standing relationships with them. We ensure that we have relationships at all levels within distribution and we have a dedicated team that works purely within distribution.
We don’t see distribution just as a place to stack the products high and sell them out. We work with all levels of distribution to put the right campaigns in place to ensure that D-Link is a profitable franchise for our distributors. I think the real secret is to create a mind set with the distribution sales teams, so that they feel that they’re a natural extension of our sales team.
Talk us through the process one of your products goes through to get to market.
Right from the outset, we work with our engineers on concepts and ideas for products. We receive feedback from the local market on how the smart home is developing and what products are popular and feed this information back to the engineers. We then get to a point where we have a concrete product that we can talk about and by this time, we will have specifications, pricing, and an idea about what a product is going to look like. Next, we look at the local markets: is this a product that we’ll bring into Europe and eventually into the UK market?
The sales and marketing plan is next on the agenda. Looking back to two and a half years ago when we started to develop the smart home products, this was a relatively new concept. Therefore, a lot of education was needed to position D-Link as a leader in the smart home market sector. We concentrated on thought leadership, positioning of the D-Link brand as well as the value proposition offered by our smart home solutions.
To create awareness, we used a mix of social media activity, training events and presence at exhibitions to get the product range and message out there. It was important to get people to first understand that D-link is one of the leaders in the smart home market and, second, what the product can offer to the market.
From a sales point of view, we looked into what the right channels were for those products. For example, with smart homes we started with a traditional IT retailer, in this case, Dixons and Maplin etc. We also launched with Staples and Screwfix, taking our smart home to channels not usually supplied by D-Link.
Looking at the market place now for smart home technology, we can see our solutions are developing more towards an installer type product. With that in mind, we’re working with trade counters, in particular plumbing and electrical, where installers source their products from. In the future, smart home solutions will be installed rather than bought over a counter.
What challenges, if any, have arisen with the diminished prevalence of traditional bricks-and-mortar tech outlets?
Like everyone else, we have seen that there are fewer of the traditional bricks-and-mortar retailers out there. While this changing dynamic presents challenges, there are many opportunities that have arisen. With the increased growth of online sales, I think we are able to reach a wider audience. So the reduction in retail sales is being more than compensated for by the increase in online sales.
It’s a different way of selling though. We ensure that we provide rich digital content, like video material rather than lots of text and lifestyle images so consumers can see how the solutions will look in real life environments rather than in standard product shots.
We’re also seeing that as your traditional bricks-and-mortar tech outlets are diminishing, opportunities are arising with trade counters. Be it electrical or plumbing, the number of trade counters far exceeds the number of bricks-and-mortar retail outlets of the past; there’s a different audience and we need to communicate with that audience in a slightly different way, but there is definitely an increased opportunity there.
Has the growth of online retail enabled you to have a closer relationship with consumers?
Yes, absolutely. Not just via our online partners but also via various social media platforms as well. We can communicate directly with consumers through those social media platforms as well as by developing campaigns with the retailers. There have been some really interesting campaigns, especially with our camera products. For example we ran one campaign asking end users how they would use a particular camera, giving them the opportunity to win one. We typically get lots of feedback with that type of campaign. We can also feed that directly back into a ‘buy now’ type action. One of the things many companies struggle with however, is effectively measuring a direct ROI from those sorts of activities, but we’re now seeing more of an ROI from an online activity moving back to online purchases.
Utilising some of the rich content we provide for our online retailers has allowed us to get the message across to consumers in a much better way. It’s also faster in terms of launching a product, getting it created, and then having it appear on an online platform compared to creating POS displays to go into retailers. So yes, we can now get much closer to real consumers faster and more efficiently using our online partners.
“We can now get much closer to real consumers faster using our online partners.”
What are your relationships like with retail buyers?
We have an experienced team that work the consumer channels. The key people in that team have been in the business for many years, so have developed excellent relationships with retail buyers and fully understand what they are looking for, helping us to deliver real benefits to the retailers.
Are there any specific difficulties that you face in getting your products to market?
We have some great relationships with a broad range e-tailers, retailers and Channel partners and as I mentioned previously, our relationship with distribution as well. Probably, the biggest decision is deciding which channels and which partners to go with, and then to decide what the best approach is for each of those partners. Going back to the smart home solutions market, our initial plan was to develop that business through the more traditional brick and mortar tech outlets, which we have done and seen success with. However, now that market is changing, we’re developing the business through trade counters and also with specialist e-tailers. I can’t think of any specific difficulties that we face in getting products to market. I think this is because we are able to utilise the solid relationships we have built within the traditional channels to branch out into new market areas. We have shown that there is value in our products and solutions which will also bring value to our partners.
How much autonomy do you have over your retail presence?
We have some very good relationships with the main retailers which our very experienced account managers have built up over a number of years. Because of the trust we have built up with these partners, we get a lot of leeway with the way products are presented to the public. Typically we will agree a specified amount of shelf space with the retailer and we will then provide a number of options as to how we’d like the products displayed. That could be a static display, or – in the smart home example – an interactive display, or a display using some kind of screen to play videos etc. We’ll offer a number of alternatives which our team will then discuss with the retailers and come up with something that works for both of us, from an overall presence point of view and looking at initial calculations around return of investment. So, with the relationships that we’ve got and the way we’ve worked with the retailers in the past, I am very happy with the presence we have with them today.