Getting your products on retailer shelves can be filled with hurdles. Retailers allocate shelf space based primarily on profit margins. Those profit margins are razor-thin, so getting your foot in the door is incredibly challenging.
Add to that the impact that ecommerce sales have had on physical stores, and you see that shelf space has to be optimized, from the retailers perspective.
Fees Make Slotting Difficult
The up-front costs to gain shelf space can be tough for new or small CPG brands. For instance, "slotting" fees or allowances, which have been around for decades, are required by many retailers that have scarce shelf availability. These fees can be in the form of a discount on orders or an actual payment made to the retailer.
A fee to retail grocery products for a supplier, for example, could be as high as $50,000 to appear in only 600 stores. And some retail brands also charge significant fees for seasonal releases or end-cap displays. In cases where there are a huge number of stores, these fees can add up to millions!
So newcomers or smaller brands have a hard time competing with national brands. You've got to have every edge you can. Over the past 27 years, I've seen the ways which some manufactures have been able to compete for shelf space. Here are a few front-end tactics to keep in mind when you're looking to gain shelf space.
Show them you're on top of store servicing
Even when your product is well conceived, well made, and fits a consumer need, if items can't get onto the shelf on time, every time...you're in trouble. Retailers want to know that your field service team is managed EFFECTIVELY AND EFFICIENTLY. You need to explain how you manage the field team (using the best retail execution platform available!) so issues such as stock-outs or empty shelves don't happen.
Describe how you record every visit, every task, every survey...how you manage scheduling in real time...how you can update retailers before a rep leaves the store. If you can't show your retail prospects how you've got the best managed team, you'll have a hard time convincing them to open shelf space.
Show them the data!
You won't get far these days without having store-level and shelf-level data. In some cases, retailers have internal data collection systems, but you need to show them how well you manage categories as well. Explain how you use data to improve the retailer’s bottom line. Then show retail buyers some hard data that reveals your brand’s proven success record and capability to attract and handle consumer demand.
Show them a few store audits. Explain how data improves followup. Point out some-store promotions that have succeeded. The point is that you should explain how you manage the team then show them your successes through the data.
Manufacturers will sometimes pay retailers to get store-level and shelf-level data. You won't have to if you have a retail field management system that will collect and organize data for you. You eliminate that cost and improve your chances for more shelf space by having your own data collection and analysis tools.
Keep this in mind: store-level data can play a large role in your product development strategies. Understanding customer behavior benefits both you and the retailer. By sharing data with your retailers, you increase the chances of optimizing shelf space for maximum profit.
Tell them the story of your brand
Avoid just telling retailers how great your products are. Show them the brand “vision”...sell them on your entire brand. Most CPG manufacturers that I know want to dominate their categories. Explain to your retail buyers HOW you intend to accomplish that.
You want to establish a connection beyond getting and fulfilling an order. So tell them about the story of your brand, then connect that story to how their stores will benefit. Make sure you make that connection for them; otherwise, it's just a story...and they've probably heard hundreds of them.
Work with them to optimize shelf space and speed-to-shelf
When retailers and CPG manufacturers work together to develop products that they both feel consumers will buy, the speed at which the products actually reach the shelves increases. If you want to get yours onto their shelves, do what you can to partner with their objectives, buying processes, floor design, etc.
Make their goals your goals. Every store has to be PERFECT, so you need to do everything to ensure availability, visibility, and profitability. Make sure your field team has the store's best interests in mind each time they visit. And convince your team to go above and beyond...this will keep your brand top of mind to your retailers.
Keep retail execution tight
Project execution has to 100% PERFECT, so it's important that your reps are prepared and equipped to visit stores every day. This starts with hiring the best brand reps. Make sure your interview process finds the people who are passionate about your products and their role. Next, train them completely to perform tasks efficiently, handle adverse situations, and put the customer first every day. Finally, manage them with real-time information to make sure you minimize issues.
Ultimately, your field reps – the people on the front lines – have to execute. If someone spends an hour texting his spouse instead of stocking your latest release on the shelf the day before a regional advertising campaign launches, all of the groundwork laid months in advance is goes to waste! So, if you can show your retailers that your team's execution is perfect, they'll be more likely to give you their business.