Not so long ago, retailers across our delightful nation started to discuss new trading terms for their home entertainment departments.
Quickly the “talk” turned to adoption across the marketplace. While whispers of “Scan Based Trading” were just beginning to buzz in the corridors and conference rooms of other distributors and studios, our team was already leading the charge to transition our labels into this new world as seamlessly as possible.
But let’s back up. Not everyone even knows what we’re talking about. To appreciate this pivot fully, here’s the backstory: the home entertainment industry existed for decades under a model where the process was pretty much as follows:
- (1) distributors pitched retail buyers,
- (2) orders were placed by retailers for all those awesome DVD titles,
- (3) goods were shipped to retail stores and warehouses by distributors, who then
- (4) collected monies after an agreed-upon interval of time.
Most of these DVD/Blu-ray goods were expected/projected to go home with happy customers, with a certain unfortunate percentage destined to return to distribution warehouses eventually. In this model, a retailer’s resources were tied up in inventory, awaiting a sale.
The Scan Based Trading model represents a different approach entirely. With SBT, suppliers maintain the ownership of the inventory within the retailers’ stores or warehouses until the item is scanned at the point of sale. This reduces financial risk on behalf of the retailer, while literally, nothing looks different to the consumer in the store.
But what’s the impact on the supplier? We asked Pat McDonough, our SVP of Sales and here are his thoughts on the topic:
“The benefit of the SBT model is that it gives Distribution Solutions control of the space, which guarantees product placement for our label partners. It also allows us to make sure that the right product is in the right stores for the best sell-through.”Pat McDonough, SVP Sales
As far as scope, Distribution Solutions currently trades on SBT terms with Target, Best Buy, FYE, Fred Meyer, and Bi-Mart. But that’s not all…
Distribution Solutions also manages SBT inventory within Dollar General (with permanent racks in 4,700 of their 17k stores!) and Menards (a value bin AND a dedicated 4’x6′ fixture).
Our team’s dedicated floor space and fixtures represent valuable opportunities for our team to curate re-sets that support the lifecycle planning of our partners’ content. Our relationships also allow us to think outside the box (and in-line sections) and place trays and other specialty POS displays to support key releases across these accounts.
To learn more about Scan Based Trading and Distribution Solutions, drop us a note at firstname.lastname@example.org