How To Address Declines and Deletes at Retail

Michael Tallia

by Michael Tallia

July 10, 2019

Bedrock Takeaways

  1. Discontinuation at retail is usually a gradual, not sudden, occurrence
  2. Using data, you can recognize the patterns that can lead to discontinuation 
  3. Data-driven selling stories can be tailored for almost every retail situation, if you know what you need to accomplish

Discontinuation by A Thousand Cuts

It’s quite rare for products to be suddenly discontinued without warning. What often happens is that CPG goods will suffer a death by a thousand cuts — prompted by ongoing declines and deletes at the retailer. These cuts erode your market share bit by bit, until eventually you are left with nothing. They are particularly damaging to small brands and regional players who lack the resources to compete against major brands.

Thankfully, addressing declines and deletes at retail isn’t impossible. It does, however, require you to be aware of sales data. Keeping abreast of item and category trends on a weekly, monthly, and quarterly basis will allow you to get ahead of any performance downturns before they snowball into larger problems.

The best way to prevent this kind of untimely demise is to identify the root cause of cuts as soon as possible, and then convince buyers to reverse course before it’s too late. Let’s break down those two steps in more detail.

Finding Root Causes When They Occur

Decines and deletes at retail can occur for a number of reasons. Perhaps your brand neglected a major promotional program that you took part in when a product first launched. Your retailer might have reduced the wrong SKU when adjusting volume to fill a product category void. They can also happen when items are moved to unsuitable product categories, making it difficult for customers to find them.

Regardless of the reason, it’s crucial that analysts determine the root cause immediately. Neglecting to pinpoint the moment a revenue slip occurred often subjects your brand to poor buyer perceptions. If left unaddressed, it can have a runaway effect that reduces overall performance further within a given account. The longer you ignore a slip, the harder it is to rebound from its impact.

The good news is that CPG companies can leverage data to spot these trends almost immediately. Let’s say performance has suddenly declined within a given quarter. By analyzing historical data — particularly by comparing it from the same quarter in previous years — you can narrow down any trends or product changes that likely triggered this decline. [FYI, this can be accomplished especially quick with data visualization tools such as Bedrock, which render complex data sets into easily digestible forms.]

Creating Data Stories that Address Brand Perceptions

Once you’ve established a root cause, there are usually self-evident strategies that will help you course correct. Generally speaking, you want to change the way your brand is perceived within a retail account, which requires a new data story that presents it in a different light. As a somewhat exaggerated example, if you’re selling high-end, organic kombucha at a low-cost convenience store, your brand image probably doesn’t reflect the expectations of your target audience. You’ve got to think about how you want your brand to be perceived and what you can do to cultivate that image.

Choose Data Stories that Reflect the Retailer

Wherever possible, your product strategy should also reflect the overall strategy of your retailing partner. By showing that your products perform well within a given retail channel, it’s far easier to convince buyers of your brand’s ongoing value. Whole Foods and Sprouts, for example, are usually far more willing to shelve local products than big box retailers like Target or Walmart are.

Pitching unique data stories to big-box retailers can be more challenging, but the principle remains the same: You want to present products in ways that highlight how they are competitive within a conventional channel. This is quite difficult for niche products, but isn’t impossible if you have promising performance data that helps your brand stand out.

Just as these data stories help you pitch products to retail buyers, they can also counter concerns about short-term performance declines. Retailers who support startup brands, for example, tend to be more lenient on initial product performance because they recognize it will take time to grow. You might be surprised at how a data story about your growing brand — rather than an overnight success — will convince these retailers to watch your performance for another year.

Boost Performance with Promotions Before a Category Review

It’s especially crucial for your account to be in good standing well before a category review. Retailers usually decide whether to maintain or discontinue a product weeks in advance, leaving you very little time to turn around any downward trends.

When you’re short on time, the best strategy is to run a promotion that will shore up your overall sales numbers. Use data on previous sales to determine an effective price point that will increase sales and move volume. While retailers will certainly be aware of what you’re doing, these results help determine whether your brand still has value to customers. They can also send a clear message to retail buyers about your willingness to hustle and your ability to drive smart growth.

Slips and slashes at retail are frightening when left unaddressed. Yet with the right data solutions, it’s possible to halt these challenges at their source, securing your presence in any channel or category. For more details on how Bedrock can help your brand performance, check out our product demo today.