The best way to boost sales at a new store is to forge strong relationships with the store's retail partners. Wherever your product is sold in retail stores, sales velocity is a measurement of how quickly it moves off the shelves and into customers' shopping carts. A CPG manufacturer can tweak tried-and-true levers to maximize a brand's sales velocity.
Securing shelf space at a major retailer is a huge win for consumer packaged goods (CPG) companies. The true test, however, begins after the product is placed on store shelves. Growing the category, increasing sales, and establishing a firm presence within that retailer are not simple goals to achieve.
In order to achieve sustainable growth in sales, it is necessary to engage in planning, execution, and creative thinking. In this article, we will investigate a few of the most important strategies that consumer packaged goods (CPG) firms may implement to expedite growth with their initial retail partner and, ultimately, to set the stage for future expansion.
CPG brands must articulate a compelling value proposition that resonates with their potential consumers in order to drive sales velocity. Define your product's unique selling proposition clearly, focusing on how it differs from others in its ability to solve a problem or meet a need.
Create a compelling narrative for your brand that will strike an emotional chord with customers and leave them feeling informed and engaged. Then, make it a point to spread the word about your brand's beliefs and history wherever you can within the store's walls. You need to make this story unique and authentic to make sure it will resonate with shoppers and store personnel alike.
CPG brands that want to boost initial sales velocities can greatly benefit from an in-store demo of their products. Demos, conducted by skilled brand ambassadors, significantly boost sales, brand recognition, and customer confidence by engrossing shoppers at the point of purchase. Customers are more likely to make purchases after experiencing a product demonstration because they are able to directly engage with the product, learn about its benefits, and make an educated decision.
The cost of Customer Acquisition (CAC) for an in-store demo event is often less than half of the cost of digital media. Successful product demonstrations are a powerful tool for consumer packaged goods companies looking to increase sales and cement their position with their first retail partner. However, the benefits do not end there; sales data and formalized customer feedback collected during these events provide market research that serves as the jumping board for other retailers shelves at lower costs and allowances. Utilization of in-store demo event management software for collecting and analyzing such data is critical. Of course, not every product and every store are a good fit for an in-store sampling event, but you can forecast their suitability using this free calculator - Is The Juice Worth The Squeeze?
The cost of the event depends on the products (cooking, preparation, or special handling), the geographic area (labor cost), and the length of the event, among other factors. For example, expect to pay between $25 and $35 per hour for the services of an experienced Brand Ambassador (food and beverage, non-alcohol) who is expected to actively engage shoppers to experience your products, and convert ~28% of them into your new customers.
It is safe to say that the cost of labor and administrative overhead are two major factors to consider when determining the cost of in-store demos, and both can be optimized with the help of good event management software.
Price promotions like one-time price reductions, multiple purchases, two-for-one deals, and instantly redeemable coupons can help you boost base sales and sales velocity. Price reductions can be thought of as a tactical move as opposed to a strategic one, though. Any promotion should aim to encourage customers to test out your goods at a discounted rate before coming back to purchase them at regular prices. The consistent growth of a brand's base sales is a sign of brand health. Consider measuring base vs. incremental sales across your key items using the weekly syndicated data.
If you want your products to move quickly off the shelves, you need to make sure they are always stocked in the store. Most new brands don't have the resources to negotiate for prime real estate like eye-level shelves or end caps, so you'll have to put in some extra time and effort at the shelf to get there.
Your product's placement on the retail shelf can have a big impact on how quickly you sell it. Eye level is typically the best, followed by waist level, the top shelf, knee level, and then ankle level. This, however, is oversimplified because it is the retailer, not the manufacturer, who decides where products will be displayed on the shelves. However, shelf positioning is important. When placed on a lower shelf where kids can see them, confections, for instance, show a 39% increase in sales. On the other hand, because they were more difficult to lift because they were placed higher, 54-oz juice cans were sold 15% less when they were placed on a higher, more visible shelf. So be sure to give the shelf placement of your product some serious thought. Specific comparative analyses can be used to persuade retailers that your SKUs should be placed on the appropriate shelves.
A product's digital shelf placement is now as crucial as its physical counterpart in today's retail environment. Customers who rely on online grocery stores and last-mile delivery services rely heavily on accurate digital shelves. Make sure that your products have competitive prices, are adequately stocked, and are pleasing to the eye. I can assure you that money put towards merchandising at an early stage will be money well spent, and the cost per store rarely exceeds $30.
Limiting your product options may seem counterintuitive, but it can actually increase your sales velocity in two ways. The first can be attributed to choice paralysis, which demonstrates that consumers purchase more when there are few options and less when there are too many. Therefore, when purposefully reducing your options, be sure to only keep your best-selling items on the shelf. Having fewer but more effective SKUs in distribution also boosts your brand's average velocity, which aids in velocity. Since all manufacturers are utilizing the same syndicated data, it will be challenging for them to use your improved brand velocity as evidence for their discontinuation. Use a quadrant analysis across velocity and distribution to examine all competing items.
Strategic promotion is essential for attracting new customers and increasing sales. Create an engaging in store marketing campaign that meets the needs of your target market by collaborating closely with your buyer. Though it may not work for every store, you can increase sales by offering trial and purchase rebates (TPRs), incentives for bulk purchases, or special discounts for your store. Don't overlook the power of targeted advertising campaigns, social media, and other digital marketing avenues to expand the reach of your retail specials.
The best way to boost sales at a new store is to forge strong relationships with the store's retail partners. You can learn a lot by working closely with the retailer's category managers, marketing teams, and front-line employees. If you interact with your retail staff in a constructive and consistent manner, they can become some of your most effective salespeople. Maintain an atmosphere of open communication by regularly disseminating information about sales results, market movements, and customer feedback. Keep the lines of communication open and look for ways to collaborate on in store marketing campaigns or co-brand promotions to boost sales. Brand-retailer partnerships are not one-sided; rather, they are built on a sense of community and mutual benefit.
It is difficult for a consumer packaged goods brand to achieve high sales growth with its first retail partner without extensive preparation and flawless execution. CPG brands have a better chance at long-term success if they create a detailed strategy and dedicate their resources to putting it into action. Keep in mind that maintaining a healthy rate of growth in sales over time calls for consistent hard work, new ideas, and the flexibility to respond to the ever-shifting demands of the market. Your brand can succeed and pave the way for future growth and expansion if you take a retail-focused approach and are committed to your retail customers.