For many minority-owned businesses, to venture into the world of retail can seem impossible. However, many Black- and brown-owned businesses have successfully made the journey to retail, including The Lip Bar and The Honey Pot. The missing link is knowledge about the mass retail entry. The New Voices Foundation is working to provide that information to these businesses as part of its mission to create a more inclusive entrepreneurial ecosystem for women of color.
Guided by its Purpose, Access, Capital, Expertise (PACE) model, the Foundation invests in diverse programming–including entrepreneurial summits, accelerators, pitch competitions, coaching, master classes, and more –to advance the significant contributions of women of color entrepreneurs to our economy.
To that end, New Voices has partnered with Portu Sunberg—a full-service consumer brand agency focused on helping businesses break into and, most importantly, remain on the shelves in retail spaces—to host a series of upcoming RETAIL 101 virtual sessions. During the upcoming sessions, scheduled for October 22nd and 29th and November 10th and 17th, 2020, entrepreneurs will learn how to take strategic next steps to move their businesses into retail. In anticipation of those sessions, learning from the experiences of growing Black women-led brands, The Lip Bar and The Honey Pot is also valuable.
Jamika Martin, the founder of ROSEN Skincare sat down with Beatrice Dixon, founder of The Honey Pot, and CEO and Founder of The Lip Bar Melissa Butler last month to share their experience in retail to inspire others seeking that same goal. Their conversation introduced the programming for the New Voices + Target Accelerators $100,000 Virtual Pitch Competition, which aired on EssenceStudios.com on September 25th.
In the 35-minute discussion, spurred by Martin’s questions, Dixon and Butler shared candidly their successes and failures on the road to retail, laying out actionable steps and practical advice that businesses should consider.
Here are five key steps gleaned from Butler and Dixon’s answers:
#1: Look for an opening
“I was so committed to getting into retail that I blind pitched [buyers]”—Melissa Butler, The Lip Bar
The Lip Bar founder cold-emailed large retailers persistently until making a solid connection with a buyer. In today’s world, Dixon suggested using social media networks like LinkedIn as a way to connect with buyers at potential retailers.
Both Dixon and Butler emphasized the need to find retailers that align with the company’s brand. Understand that a brand-retailer relationship is mutually beneficial. A brand’s value proposition should clearly align with the stores being approached. For example, Butler mentioned that The Lip Bar would not pursue high-end makeup retailers because the price point of their product would not support placement in those spaces.
Looking for an opening is not only about how and who one approaches, but proving the company’s vision to potential retailers. When The Honey Pot was sought out by a Target buyer, Dixon had an entire line of product prototypes made. The Honey Pot was poised to expand into a feminine wipe, maxi-pad and feminine wash company, but they needed to be able to demonstrate that to the buyer. The company took a leap and invested in these prototypes rather than trying to sell their vision using traditional presentation tools. According to Dixon, it was a risk that paid off. Having a tangible product-proof that the buyer could hold and interact with was a crucial part of their pitch.
Meanwhile, it took The Lip Bar seven months from acceptance into Target’s online store to actually being featured online. The Honey Pot was placed in stores approximately one full year after being accepted by the retailer.
Dixon noted that one must be cognizant of the process. Depending on the category of the product, big retailers accept new brands and/or products only once or twice a year. This undertaking requires patience.
Notable takeaways when looking for an opening:
- Know your company and/or products’ value proposition
- Use available resources and networks to seek connections to retail buyers.
- Be persistent.
- Have proof to make it easier for buyers to see and understand the company’s vision.
- Be patient.
Once a business is in one retailer, Butler and Dixon suggest that it can be easier to get into other large retailers by finding a broker.
#2. Find a broker
Brokers in the retail space work with specific retailers to place products in their stores. Dixon suggests that if a company already has placement in one major retailer, they can research brokers for other major retailers. The goal here would be to find a broker to usher them into new retailer relationships.
Butler emphasized that a broker helps a business to fulfill its vision, but a broker will not scale a business. A company must be self-directed in its vision for the types of retailers and retail relationships it wants to develop.
Each brand-retailer relationship will be different. However, making those connections usually begins with a broker and a small start.
#3. Start small
It’s normal to want to scale quickly and have products on the shelves of every retailer’s location. However, Butler and Dixon agree that this would be a big mistake.
“You don’t know what you don’t know,” said Butler.
“Start small” said Dixon, “anything could happen.”
Dixon recounted that The Honey Pot requested to start with just 50 stores with their first major retailer due to the unknown variables in shoring up their supply chain. Butler agreed it was important to start small as The Lip Bar also ran into supply chain issues that caused restocking delays in the beginning of the company’s retail journey.
The consensus was that there is a degree of on-the-job training that occurs as companies transition into the retail space. Starting small allows a business time and space to figure out the internal changes that need to occur without major consequence.
#4. Be transparent
“When you’ve got a retail partner […]the most important thing you have to do is to be remarkably honest with them,” said Dixon.
The panelists brought up the importance of being honest and transparent with retailers and consumers alike. When The Lip Bar’s products first hit shelves, they were not designed for shelf. This was a lesson the company learned and had to quickly redesign their product so consumers could find them on shelf. Alongside their aforementioned supply chain issue, the brand was open and honest with their consumers about the challenges of their growth into retail and asked for patience. The same was true of the relationship with the retailer.
According to Dixon, businesses should remember that the brand-retailer relationship is a partnership and has to be approached as such. Keeping an open line of communication about any possible breakdowns in the supply chain or any other concerns is paramount to maintaining a healthy relationship with realistic expectations.