Pitching your product line to a retailer? There are so many areas to cover. Do you know which three facts matter most to the decision-makers?
The greatest challenge product companies face is convincing retail buyers your brand will sell. If you want shelf placement in Target, Walmart, CVS, or ANY retailer for that matter, your retail pitch (or as I call it, the Retail Story) needs to address retailers’ key needs. And their primary need revolves around mitigating their sales risk.
The following are the 3 most effective ways to show retailers how you will mitigate their sales risk as you’re pitching your product to retailers and stores:
The best way of showing how you will mitigate sales risk is by showing them your product sells already. Ideally, you would show sales traction from stores most similar to the store you are pitching to. For example, if you are pitching to CVS, you will likely want to show them sales history from Walgreens, Rite Aid or another smaller drug store chain. Sales history is always a good indicator of future sales potential.
If you are not widely distributed yet, you can always show sales numbers from independent retailers or boutiques. If your product line is brand new, then build sales traction on your own website or Amazon first before approaching brick and mortar retailers. Just note that you want to minimize your online retail distribution once your business has scaled up to national or big box retailers to avoid channel cannibalization.
The best sales metric to show retailers is Sales Per Store Per Week (SPSPW) in either unit volume or dollar sales. How do you calculate this? Simply take your sell-through unit or dollar sales, then divide it by the number of stores your product is sold in and then divide it again by the number of weeks of sales.
Please note that retailers ONLY care about sell-through or Point of Sales (POS) data. Many new brands confuse shipment sales (the orders you ship out) with sell-through or POS sales. They are different. Sell-through reflects consumer demand, which is how retailers measure brand performance.
The momentum of your brand is important, especially large retailers. Brand awareness does not build overnight, not even with the largest of marketing budgets. Awareness takes time. So often times a new brand will not have the sufficient brand awareness levels to support sales at shelf. This is why new brands are deemed highly risky.
A good marketing plan for retailers is one that is comprehensive and multi-prong. It should incorporate both digital marketing and offline marketing. Digital marketing can include anything from online ads, social media, and video marketing. Offline marketing consists of the traditional methods of marketing.
It can include out-of-store methods such as PR, event marketing, TV or print advertising. It should also include in-store marketing such as promotional funding, merchandise displays, and shopper marketing campaigns.
A marketing plan that satisfies retailers is one with a consistent cadence of marketing activities across multiple consumer touch points. And it must align with the same shopper segment that retailer is targeting.
A huge risk for retail buyers is working with brands that have minimal experience shipping to retailers. No matter how strong your brand’s sales performance or how amazing your marketing plan, if your product does not arrive in stores on the correct day, that’s a lost day of revenue for the retailer.
Conversely, if inventory arrives early, you have just incurred extra inventory costs for the retailer. Precision is key in vendor execution and it takes a village to pull it execution flawlessly.
Supply chain management and inventory management are complex disciplines. Even the most established vendors like Proctor & Gamble will make mistakes from time to time. For brands with less experience fulfilling orders to large retailers, it can become overwhelming and costly to make mistakes.
For a brand that has not yet scaled up to the national level, you’ll find yourself haphazardly speeding through the learning curve and frantically build new infrastructure without the luxury of having tested it. Your best bet for mitigating this risk is by building the right external team and presenting this to the buyers.
Show that your team includes:
Nail these three elements in your retail pitch and you improve your chances of getting placed in retail stores.