5 Reasons To Focus on Independent Retail

When it comes time for brands to think about selling through wholesale channels, they are often thinking about how they get into the big box retailers. Stores like Whole Foods, Target and Wal-Mart jump off the page to many brands. And while getting into one of these retailers can be a game-changer for a brand, opening up new revenue and marketing opportunities, they also come with challenges and strict guidelines. It’s not uncommon for a brand that is selling into big box retailers to have a dedicated team member that is responsible for managing the relationships and paying careful attention to every little detail that the store demands. You’re also certain to receive less favorable terms on price, shipping, and returns. And once you get into a big box retailer, the last thing that you want is to lose the account. 

Lost among the focus of most brands selling wholesale is the power that the independent retail channel can unlock them. As of November 2023, a staggering 2.7 million independent retailers existed in the United States, generating an estimated $3.5 trillion in annual revenue—a figure projected to rise to $3.7 trillion by 2025—proving that independent retail commands attention. To put this into perspective, this revenue is three times that of Amazon and Walmart revenue combined. 

In this article, we’ll delve into the world of independent retail, explore its benefits, and understand why it deserves a spot in your business strategy.

What is Independent Retail?

Independent retail refers to businesses that operate on a smaller scale compared to large retail chains (like the aforementioned Whole Foods, Target or Wal-Mart). Independent retail stores are typically owned and operated by individuals or small groups, and they often have a single or a limited number of locations. Independent retailers span various sectors, including fashion boutiques, specialty food stores, local hardware shops, and more. Some notable examples include local bookstores, artisanal bakeries, and independent clothing stores. These retailers are characterized by their unique product offerings, personalized customer service, and strong ties to their local communities.

When it comes time to selling into independent retailers, they unlock a number of benefits that traditional “big-box” retailers don’t necessarily afford. And the great aspect about independent retail is that you can start selling to independent retailers as soon as you launch your product or brand. Most big box retailers require historical sales information and take years to get into and that is far from the case when it comes to selling into independent retailers. 

We’ve compiled a list of some of the benefits of selling into independent retailers, so we can convince you that the juice is worth the squeeze when considering targeting more independent retailers to grow your business. 

Increased Visibility from a Marketing Perspective

One of the significant advantages of partnering with independent retailers is the increased visibility it offers. Independent retail stores often have loyal customer bases and are deeply embedded in their local communities. By placing your products in these stores, you can tap into these established networks, increasing brand exposure and attracting new customers who prefer shopping locally and supporting their local stores and brands. 

To take this a step further, it’s more expensive than ever to acquire a customer online (with customer acquisition costs up over 200% over the past eight years). So having your product on more store shelves gives you the opportunity to be introduced to more potential customers, without needing to spend a boat-load of money on customer acquisition. When a potential customer is introduced to a brand in a store, they can pick the product up to learn more about it. And even if they don’t buy the product right then and there, it’s possible that they will go to your website to buy it in the future. 

Diversified Sales Channels to De-risk Your Big-Box Accounts

Relying solely on big box retailers can be risky. Any disruptions, such as changes in purchasing policies or economic downturns, can significantly impact your sales. If you were to be solely reliant on big box retailers for your wholesale channel and the big box retailers decided to stop ordering from you, your business would be severely impacted. 

By diversifying your sales channels to include independent retailers, you can mitigate these risks. This diversification ensures that your business remains resilient, even if there are fluctuations in your big-box accounts because you will be able to become less concentrated and reliant on one retailer to drive a bulk of your business. 

Proving Sell-Through to Attract More Retailers

Selling through independent retailers can serve as a proof of concept for your products. Say you want to test a new product that a number of your larger big box retailers are potentially interested in testing in their locations. Oftentimes, the big box retailer will want to see some sales data prior to committing to bringing it into their stores. And independent retail can be a great avenue for you to test your new product out in an effort to show sales data to big box retailers. 

Successful sell-through rates in these independent stores can demonstrate the demand and marketability of your products. This track record can be a powerful tool in your negotiations and expansion efforts.

Testing Ground for New Products and Packaging

Similar to the above point about leveraging independent retailers to prove out sell-through numbers, independent retailers provide an excellent platform for testing new products, packaging, and marketing strategies. Having the ability to test iterations of your product or new packaging on a smaller scale, before going more broadly with changes, allows for faster feedback and adjustments. You can experiment with different approaches and quickly learn what resonates with customers. 

Developing a More Local Connection

Working with independent retailers fosters a deeper connection with local communities. One of the great and unique aspects of independent retail is that most independent retailers have strong local community ties. These stores are often seen as pillars of their neighborhoods, and their customers value the unique, personal touch they provide. By aligning with independent retailers, you can enhance your brand's reputation and build lasting relationships with consumers who prioritize supporting local businesses.

If you are in a number of independent retailers in a particular city or neighborhood and your product is doing well, it’s likely that the customers supporting your product/brand will tell their friends about it. And soon, their friends will be buying the products and they will be telling their friends. So what started out as your products selling well locally could soon morph into a more broad increase in demand for your product or brand. 

Take-aways

It’s clear that independent retail is a powerful and dynamic segment of the market that offers numerous benefits for brands. With their significant economic impact and potential for growth, independent retailers present opportunities for increased visibility, diversified sales channels, proven sell-through, product testing, and local connections. By recognizing and leveraging the power of independent retail, brands can unlock new avenues for success and resilience in an ever-evolving retail landscape.

If you are currently selling to independent retailers and need some help managing and scaling your efforts, we’d love to chat. Vanik helps brands automate, scale and personalize their independent retail relationships, while saving them time and money. Set-up time to chat with us here.