Cause and Effect Series: The Retail Partner Effect
This takes us into your retail partnerships. What a nightmare for smaller brands. You are up against:
- Retailers that give priority to big brands and their own private label brands
- Retailers that are not adequately staffed and you are not the priority.
- If the retailer is national, it can feel impossible to know if your POP’s, marketing campaigns, product placement etc. has been deployed according to your understanding.
- The competition who may be getting preference.
- Difficulty knowing and managing inventory.
Getting listed is the first goal. Once listed how do you stay there? Getting de-listed could be devastating to your brand who may have come to rely on new revenue as a result of being listed with that retailer. We have seen this happen.
Often the retailers can cause a lot of the problems that lead to your products selling poorly. If this becomes a trend you can find your brand delisted as fast as it got listed.
Stores have tens of thousands of products to look after, and private label will always take priority. Brands usually will need to be at about 100 million in revenue before they will look at building their own national teams to oversee what is happening with their products at retail stores. Until you get there you will need to be able to know what is happening at the store level.
TIGHTENING YOUR MERCHANDISING IS THE BEST PATH FORWARD
Unless you have your own in-house national team, there is no way to overcome the cause and effect occurring across the retail industry at the moment. In the absence of same, a merchandising partner will be necessary.
The best way to be pro-active about your merchandising.
1. Look at what truly costs business and causes shifts to brand loyalty and start there, prioritizing what you need to know most.
a) Stock
b) Pricing validation
c) Planogram compliance
d) Validation of POP displays, end caps etc.
Establish the high priority top level things you will measure consistently and establish KPI’s.
2. Work with a merchandising partner who is already supporting other brands nationally. This will enable you to piggyback on those store visits and net you even better deals.
3. Consider where to heavy up on merchandising and the seasonality of your products. We saw one toy brand increase holiday sales substantially, simply by restocking three times instead of two over the holiday rush.
4. If you don’t have the budget to go in deep on technology and AI, work with a partner who brings that to the table.
5. Work with a partner who has the technology and resources to be able to restock shelves when product is found not to be there, correct pricing, switch out POP displays etc. The goal is not just to find problems, its to correct them as quickly as possible so they are least felt by your customers.
You may be thinking that retailers are providing data that says everything is fine across the board at retail stores – so retail merchandising support is more of a want than a need.
Retailers will generally position the data in a way that it isn’t exciting or even actionable for the most part. They may also condition you to accept SLA’s on their side that aren’t good enough for your customers.
For more information about this topic download our free whitepaper “How Smaller Brands Can Overcome Cause and Effect at Retail in Canada” or visit www.marketsupport.ca
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