5 Questions CPG Retailers Ask When Deciding on Shelf Space
There are few conversations more important to a CPG manufacturer than pitching products to retailers. These interviews don’t only determine whether or not your products will make it into stores, but where they will be displayed on limited shelf space — and you’re often competing with dozens, if not hundreds, of similar goods in the same category.
How do you make an impression?
Robert Esquivel, a Customer Success Manager here at Bedrock Analytics, is well-versed in this unique problem. Robert is a former Clorox sales analyst.
“The one big question that every buyer has is, ‘What’s in it for me?’ For retailers to get an item to shelf, they either must do it through a category reset process, or an In & Out process. Either way, there are several layers of protocol that must be traversed, requiring a great deal of effort on the part of the buyer. To go through a reset, get an item on the shelf, push it out to store level, impacting hundreds if not thousands of stores with this one decision, the buyer better be sure it’s the right decision.”
There’s a lot riding on these decisions, so having data that meets retailer needs is crucial. As a CPG manufacturer, always make sure you can answer the following questions before meeting with a buyer.
How Will This Grow the Category?
It doesn’t matter whether your product will replace something that was discontinued, or will go up against against similar goods from competitors. The main question is whether your product can help the buyer grow its category and / or market share.
“You have to be able to show that the grouping of products you define as your category will grow when your product is brought in. Whether it’s replacing an item or it’s an incremental item, you should be able to demonstrate that your product is unique or adding value,” Robert explains. “It’s a very difficult process to bring a new item onto the shelf. Every manufacturer should be able to explain why it’s worth it to the retailer to place their item. Knowing who the consumer is and why they will buy it is crucial to the decision process.”
This is where quality data comes into play. If you have an overview report that summarizes product rankings and top item performance at other retailers, buyers will be more inclined to shelve your product because they’re not being asked to make a leap of faith — there’s a precedent of performance.
How Will You Get New Customers Into My Store?
Of course, the easiest way to grow a category is to attract new consumers to the store. Buyers want to know that your product can increase their share of the retail market, and data on this topic is hugely beneficial.
For example, let’s say you sell a product with Whole Foods, but its niche customer base only shops there for a handful of specialty items. If another retail buyer picks up your product, that increases the chance that a Whole Foods customer will find the new location to be a better shopping option.
Showing buyers how increasing availability can drive product performance will go a long way to convincing them that their customer base can grow.
How Will You Tell Consumers About Your Item?
Bringing in new consumers means you need a detailed marketing plan, and buyers will need to know what that entails.
“Are you going to buy print ads with the retailer?” Robert asks. “Are you on TV? Do you have a new commercial launching? What do you do for seasonal strategy? Do you have out-of-aisle merchandising techniques? How are you going to tell consumers about this item?”
Whatever your marketing approach, it’s crucial to know exactly who your consumers are beforehand. Retailers need this information to build a targeted strategy around products before they reaches store shelves.
“Don’t go to a buyer with a product if you don’t know who exactly is supposed to be buying it,” Robert continues. “You should have that research done in advance. They have to know who they’re positioning themselves in front of to be successful.”
Why Do You Want to Shelve Your Product in a Specific Location?
Manufacturers must be certain to communicate any necessary shelving considerations to buyers. Product categories that might seem obvious to a retail merchandiser could in fact be way off base, and your product could end up in a completely wrong space.
Providing a retailer with data that justifies buying your product is great, but it might not mean anything if it’s placed on the wrong shelf. “You have to justify to a buyer why your product should be placed in the location where you believe it should be shelved or merchandised in,” Robert notes.
One of our clients specializes in Earth-friendly cleaning solutions. One of its products is Veggie Wash, a spray-bottle cleaner used to wash pesticides from fruits and vegetables. However, Veggie Wash has occasionally been merchandised in the cleaning aisle with traditional house cleaning products, when it actually belongs near the produce — something that Bedrock helps rectify when demonstrating successful sales performance at retail locations where the item is shelved near produce, rather than with chemical cleaners.
What happens if you’re offering a food product that’s organic, gluten-free, non-GMO, or kosher?
“You might ask to be merchandised in more than one location,” Robert suggests. “You might ask to be merchandised in the All Natural Health Food section, and in the kosher section, and on Main Shelf. You can make those requests, but you’d better be prepared to justify them with data knowing where customers are purchasing the product from.”
What is Your Promotion Plan and Investment?
Finally, retailers need to know the details about your product’s promotional plan. This is especially important when offering a seasonal item that will have peak sales during certain times of the year. Easter eggs aren’t going to sell well during Thanksgiving. Winter coats are generally ignored during the summer. Diet products can do especially well in January, thanks to New Year weight loss resolutions.
“You need to have a promotional strategy based on data — meaning that you know the peak times when your consumers are going to buy — and be prepared to share the data that backs up that strategy.”
These considerations can also be applied to price points.
“Bedrock’s promotional analysis chart helps buyers understand the best time to promote your products, and the best price to promote at,” Robert says. “Additionally, our Promotion Events calendar helps forecast and predict both base and incremental sales depending on the target price point, and time of year, by retailer.”
Let the Data Guide Your Pitch
Convincing a buyer to shelve your latest product can be challenging. But with comprehensive analytical data and the right strategy, you items will be on store shelves — and the hands of consumers — in no time.