We previously covered how recessions and economic challenges are an opportunity to advance at retail rather than retreat. But we want to go a bit deeper tactically on how you can block and tackle at retail to win over time. As such, this article will focus on the X’s and O’s of executing at retail.
It’s important to understand the game you are playing. More than 85 percent of the industry’s sales happen within physical retail locations. And 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.
One of the most important questions becomes: How do you get a customer to pick your product over everyone else’s?
These three core tenets are a great place to focus:
1. 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. Here are some expert ways to acquire new customers and earn their loyalty:
• Gain incremental placements is key. Research proves that being on an endcap gives an item about a 93 percent increase in exposure and an average 32 percent lift in sales for that item. Leverage retail support to capture incremental display opportunities at places like the register or coffee bar, or by placing shippers or clip strips to grab the eye of the impulse shopper.
• Incentivize shoppers through robust promotional programs. If you’re not in promotional calendars, using instant redeemable coupons is another way to execute this at scale. 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.
• Achieve optimal shelf placement, which has been 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.
• Leverage your competitors out of stocks and voids. 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 percent 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. Staying in stock and in distribution is key — one because it’s how you lose customers and two, if your competitors are going out of stock, it puts you in a prime position to gain customers as the alternative choice.
Execute on your merchandising X’s and O’s to be better positioned than your competition at the point of sale. Doing this consistently over time will result in stronger growth, more brand awareness, and a more consistent shopper experience at the shelf.
2. Understand your category and competition to give you a strategic edge
With grocery stores carrying more than 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 to strategizing on how you’re going to differentiate at the point of sale. Here are some questions to consider:
• What’s happening in the category? Is it shrinking or growing? Are there new competitors on-shelf? Are prices increasing or decreasing around me? Understanding the category is fundamental to staying 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-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 critical to staying relevant over time.
• 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.
Knowledge is power, especially in this industry. Boots on the ground are everything. Understand your category and competition to gain a serious advantage over those around you on the shelf.
3. Create brand ambassadors at point of sale
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 more than 2.8 million people employed in supermarkets and grocery stores as of 2021. This is a huge opportunity for brands to educate, give samples, and turn grocery store team members into brand ambassadors. A few tactical ways to create ambassadors at retail are:
• Offer VIP coupons and samples to get store team members to taste your product.
• Get in store and talk 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. 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.
Interested in learning more? Join the webinar “A Mindset Shift: Recession as a Time to Advance at Retail, Not Retreat” on September 21, 2022 at 1 pm EST, hosted by Dirty Hands, the leading natural food merchandising company active in Whole Foods, Sprouts, and top INFRA, NCG and Natural Independent Retailers.
Download the full white paper from Dirty Hands here.
