A TPH Global® client with global operations and retail channel demands describes the value of working with a partner with the expertise, resources and supply chain wide perspective to support and lift sales across their club store, big box and mass market channels.
When it comes to running a successful campaign at a big box retailer like Costco, the difference between success and failure is measured in fractions of an inch. That’s not an exaggeration.
As a global footwear and accessory company’s Director of Product Development (whom we’ll refer to as A.G.) and TPH client shared recently, “We design and produce a great collection of products and have for the company’s history done so without consideration for how our products flow through our supply chain and distribution channels.”
Success with club store campaigns comes down to mastery of the details, along with the ability to quickly mitigate little problems before they can grow into big ones.
That’s why he values his partnership with TPH. In addition to TPH’s deep expertise with club store campaigns, A.G. says the TPH team provides a level of service and problem-solving that goes the extra mile – which in big box campaigns is often a matter of inches.
When an 1/8″ Costs $250,000!
In the spring of 2019, the client was in the final stages of the product development cycle and well past the point of no return. One of the last steps before going to full production is to confirm fit in the product boxes.
As it happened, the final samples were 1/8″ longer than prototyped which required adjusting the box length and reconfiguring the product count on the pallet. The impact of that 1/8″ was to reduce the number of units on the pallet by 11%. Since the overall number of pairs of slippers had already been committed to, this meant that the number of pallets increased by 11%. This also resulted in the number of overseas containers increasing by 11%, as well as the costs for warehousing, handling and domestic freight. “All these ripples equal money,” the client said.
What started as a small size adjustment grew to a problem that significantly altered the profitability of the campaign.
Costco has strict guidelines for pallet footprints; you can’t have packaging that hangs over, even by a fraction. The company had no choice but to absorb the profit-busting option of having to reduce the number of pairs on each of the displays.
TPH helped brainstorm a solution that brought the campaign back to a solid profit. “TPH helped us understand an 1/8″ can significantly impact the profitability of our programs and even went so far as to arrange a presentation to all of the stakeholders in our company to raise our awareness,” A.G. said. “We have now revamped our design process and include TPH at the very beginning to make sure our product sizes are optimized to realize maximum profits.”
Hands-on Problem Solving When You Need It
On another campaign A.G. recalled having to tend to a shipment of product bound for Costco. When A.G. arrived at the company’s West Coast distribution center, TPH was already there overseeing another program for the company.
“Not only did they give a service, they were there to back up their service,” A.G. said.
Not realizing the scope of the issue, A.G. asked TPH for assistance and they quickly arranged for replacement materials, labor and developed a corrective action plan that resolved the issue in a few days. “It was very hands on. It was a beautiful thing to watch,” A.G. said.
The situation left him so impressed, A.G. said he called his CFO to let him know.
With TPH, A.G. said, his company gets a partner who knows “the whole situation from A to Z” and is able to troubleshoot at any point in the process. “It’s easy to have hindsight,” he said, but when problems arise, you need a partner who can pick up and manage from where you are.
“It’s a great collaboration,” he said. “I think that’s one of TPH’s competitive advantages. That type of additional service is hugely beneficial. TPH delivers what they say they are going to deliver in those extra services.”
Big Box Campaign Support with Enterprise-wide View
At TPH, we take an enterprise-wide view of your campaign, with insight into ways to prevent problems and protect your profits. We don’t just provide a display, we provide a system built around the demands of the enterprise. A successful display has to protect your product from one end of the supply chain to the other, withstanding all of the rigors of transportation along the way.
We provide expertise that begins with pitch support and continues through fulfillment. We help our clients deliver big box campaigns that lay the groundwork for the next campaign.
If that sounds like the kind of partner you could use for your next Costco, Sam’s, BJ’s Walmart, Home Depot, Lowe’s or other big box retailer campaign, give us a call or click on the link below.
