The Recipe to Winning at Retail
For Natural & Organic CPG Products
If you can’t take the heat… get a better recipe. In this guide, we will go over the three most important ingredients to crushing your competition and taking the lead in your category.
First things first...
It’s important to understand the recipe you are cooking. Over 85% of the industry’s sales happen within physical retail locations. What does this mean for your brand? It means that 85% of people are just waiting to be a part of your “one thousand true fans”.
Ultimately, success for a brand is getting off the shelf, into a basket, and through the register.
But when a consumer visits the grocery store and looks at the shelf, they have endless options of brands to choose from.
So, one of the most important questions is:
How do you get a customer to pick your product over everyone else’s?
Because you have the recipe, duh.
Here are the TOP 3 Ingredients to crushing your competition and winning at retail.
Great Merchandising is CRITICAL to acquiring and retaining customers.
The consumer shopping cycle takes time. On average, shoppers visit grocery stores 1.6 times per week. And once that customer puts you in their basket, you need to get them to do it again on the next few visits to turn them loyal.
How do you acquire new customers and earn their loyalty?
Gaining Incremental Placements
Getting your product off the shelf and into multiple spots in the store is proven to boost sales.
Research shows that being on an end cap gives an item about a 93% increase in exposure and an average 32% lift in sales for that item. In a sea of brands, display opportunities can drastically increase volume and separate you from your competitors.
Some stores have planogrammed end cap space, however, many are much more flexible and have discretion in terms of rotating products onto end caps and secondary locations. So, when space is flexible, who ultimately gets the space? Most of the time, it comes down to relationships and brands who have representatives at retail to ask for the space.
A grocery team member is much more apt to give a brand extra space if they know the brand has representation to build the endcap/display, maintain it while it is up, and then take it down when the time comes. However, these opportunities are almost non-existent for brands who aren’t present at retail to capture them. So, leveraging retail support to capture incremental opportunities at places like the register or coffee bar, or by placing shippers or clip strips, is a huge opportunity to grab the eye of the impulse shopper.
Price Pointing Through Robust Promotional Programs
You need to incentivize shoppers to give your product a shot. If a shopper is loyal and happy with the brand they are consuming, it’s psychologically difficult and a risk for them to give a new product a shot. However, in today’s environment, consumers are much more price sensitive, and are looking everywhere for better deals.
Inflation has been the main driver in this shift, with 82% of consumers looking for less expensive ways to shop due to higher prices, 40% staying within a budget, and 28% buying less overall. In other words, shoppers are willing to change their behaviors—including loyalty to their favorite brands—if there is a better deal waiting for them.
So having a robust promotional program is important to getting new customers comfortable trying something new as well as keeping current customers happy. If you’re not in promotional calendars, using instant redeemable coupons is another way to execute this at scale.
Securing Great Shelf Placement
Shoppers can’t buy your product if they can’t find you on the shelf. Getting your product on shelves that are eye to thigh level is proven to increase sales. Research shows that shoppers make two thirds of their brand decisions in store. And that shoppers begin looking at the shelf at eye level from left to right. Being on the top and bottom shelf results in a sharp decline in sales relative to being eye to thigh.
You can also think of the shelf like a billboard. The more real estate you have on shelf, the more eyes you will capture as shoppers pass by. Focusing on expanding shelf space over time will result in more brand awareness from customers. Working with retail team members to enhance your placement isn’t always easy but if you’re present often, provide value, and leverage data to prove why adjustments can help drive sales, it’s very possible to work your way to optimal shelf placement.
Leveraging your Competitors Out of Stocks & Voids
Out of Stocks Motivate Shoppers to Make a Switch
Knowing how to gain customers is also a game of understanding how brands LOSE customers. And two surefire ways to do this is by having out of stock and distribution issues.
A survey showed that out of stocks for the original brand motivated 51% of shoppers to make a switch. And over the three-month period reviewed, more than eight out of 10 consumers purchased a different brand from the one they normally purchased.
This means staying in stock consistently is vital to ensuring you are not putting your loyal shoppers in a position to try another brand. It also sets you up to being an available alternative as your competitors grapple with out-of-stock issues. An excellent merchandising tip to do this is to increase the facings of your top selling SKU’s to give the shelf more “holding power” on your top movers. We find this tactic to be very effective in reducing out of stocks.
Executing on your merchandising X’s and O’s is fundamental to being better positioned than your competition at the point of sale. And doing this consistently over time will result in stronger growth, more brand awareness, and a more consistent shopper experience at the shelf.
Understanding your category and competition gives your brand a strategic edge
With grocery stores carrying over 40,000 more products than they did 30 years ago, consumers have more options at the shelf than ever before. Knowing what your competitors are doing is integral in strategizing on how you’re going to differentiate at the point of sale.
Ask yourself the following questions:
What's Happening in my Category?
Is it shrinking or growing?
Are there new competitors on shelf?
Are prices increasing or decreasing around me?
For example, the competition could be ramping up their promotional calendars or private label could be swooping in to undercut everyone on price. How would you handle that? Is your pricing strategy robust enough to keep your shoppers coming to you when those around you are getting more aggressive? Understanding the category is fundamental to stay proactive at retail.
Who are my Competitors?
What are their main value propositions to customers?
Is my value proposition still compelling relative to who else is on the shelf?
Natural food moves quickly, and trends pop up and disappear in a matter of years. So, understanding your proposition relative to your competition is important to staying relevant over time. Brands that can evolve through various trend cycles will grow market share substantially over those that can’t or are late to adapt.
Am I Able to Grab Feedback from In-Store Decision Makers?
What do they see happening in my category?
What are shoppers saying?
What products are moving quickly and why?
There is almost no better way to evolve as a brand than leveraging feedback from the point of sale. Store team members interact with thousands of shoppers consistently, empowering them with an enormous wealth of information about what’s working and what’s not. Use them if you can.
This is a core tenet of what we do at Dirty Hands and what our partners find extremely valuable. Our in-field teams are able to provide real time pictures of the shelf at scale alongside consistent store feedback, giving our brands a significant competitive advantage through shelf and category intelligence. Knowledge is power, especially in this industry and boots on the ground are everything. Understanding your category and competition is a serious advantage to stay one or two steps ahead of those around you on shelf.
Create Brand Ambassadors at Point of Sale to Quickly Get the Word Out About your Brand
One of the less obvious advantages of being present at retail is the ability to build an army of brand ambassadors at the point of sale. There are currently over 2.8 million people employed in supermarkets and grocery stores as of 2021.
What can brand ambassadors do for you?
Over 85% of sales are occurring at the physical locations where over 2.8 million people are employed. This is a HUGE opportunity for brands to educate, give samples, and turn grocery store team members into brand ambassadors.
Remember, there are tens of thousands of brands on shelf today, most of which the team members in store know nothing about nor have they ever tasted. Bringing life to your brand with those who interact with consumers on a daily basis is a huge differentiator.
Shoppers are constantly asking for help and recommendations from grocery team members, who are much more apt to recommend your product if they have a personal relationship with it. Don’t underestimate having brand ambassadors at the point of 85% of the industry’s sales.
Tactical Ways to Create Ambassadors at Retail:
VIP Coupons and Samples. Get them to taste your product.
Getting in store and talking to team members. Share who your brand is and why it matters. Tell the story and leave behind information. This is a rare occurrence for team members, and as such, if you’re doing this, you’re beginning to create an emotional connection to your products.
Provide swag where allowed. Certain retailers don’t allow team members to wear branded swag, but many still do. Having store members wear your branded material is a walking advertisement for your brand.
Think about the impact of having sales ambassadors at the point of sale at thousands of retailers across the country. Not only do you get the benefit of team members recommending your product, but you’ll also get much more attention when it comes to reorders and promotions, simply from being top of mind.
Gaining new customers and keeping them is incredibly hard.
With grocery stores having a more robust product assortment than ever before, the competitive landscape is at all-time highs. Separating yourself from the pack at the point of sale is as important as it’s ever been. You can do this by staying consistent in executing on the strategies provided in this guide.
Things to remember:
Gaining trust and loyalty is largely a game of consistency.
Don’t give your shopper an opportunity to try a new product by going out of stock or losing distribution.
Keep your promotional schedule robust enough to provide your shopper with the price relief they need to keep you in their basket.
Don’t let your customer have problems finding you on shelf. Stay off those top and bottom shelves.
Know your category and competitors and stay steps ahead of them.
And remember, this is a marathon, not a sprint. Executing on these tactics, at scale, over long periods of time, positions you for new customer acquisition while reducing the opportunities you give those customers to try new products. At Dirty Hands, we see these strategies play out for overall brand success and growth on a daily basis. Looking for help navigating retail for ultimate success? Let us give you a hand. Schedule a free consultation with us below.