Build Relationships to Win Deals With Large-scale Retailers and Grocers
Guest Blog By Marty Gallant
In the consumer goods industry, securing premium retail placement is one of the primary concerns for distributors as well as manufacturers. Often, it is the only obstacle keeping companies from reaching the next level. With an economy at rest, the opportunities for optimum retail placement have shrunk, and competition has increased. Vitamins are one of the more difficult consumer goods areas to navigate in the category of chain drug, mass market and grocery stores.
Scores of large chain stores are swallowing up smaller chains and steadily rebranding them as spinoffs of their own brand. In the past few years alone, Walgreens has expanded its prominence as the largest chain drug retailer in the United States following its acquisitions of Happy Harry’s, Duane Reade and USA Drug. Situations like this have presented challenges for many smaller consumer goods providers. Not only do they need to work toward securing shelf or retail placement, they also must strive to earn the confidence of these retailers to maximize the time their products are in stock.
The question then becomes how you convince a retailer that your items deserve prominent placement and promotion in an overcrowded vitamin section. Know your prospective retailer’s set. Before the appointment with the buyer, visit a number of stores in the chain that vary in size and location. Stores in the same chain can have different size sets, with different products making individual planograms. The locations of the sets can vary from store to store depending on the individual layouts. In larger sets, bad placement can cause an item to get lost among a sea of other offerings. Low shelf placement in a small set can cause the item to get lost completely because they often are not as visible to shoppers.
Know your competition.
Become well-versed in the category as a whole in addition to items similar to your own. Know the retail price points of your competition. Some questions to ask yourself include:
- Would your item be one of the higher priced items in the set?
- Would it be one of the lowest?
- Is there a private label brand similar to your products that the retailer already carries?
Small consumer goods providers involved with the vitamin category will find that some retailers choose to place more of an emphasis on the vitamin section in their chains, while others will sacrifice the shelf space for other categories in the health and beauty set.
Provide the buyer options.
If you are not a vendor of record for the prospective retailer, then do not enter the meeting pitching only one item. Most retailers would prefer not to deal with a one stock-keeping unit (SKU) vendor. Instead, they are more likely to pursue pitches that include a line of items providing the opportunity to select what fits their sets and stores. The more options you provide, the better success you are likely to have. For the reasons mentioned above, it is important for small consumer goods providers to not only pitch a retailer on the purchase of an item, but to provide legitimate reasons to award the item prominent shelf placement when the topic enters the conversation. As brand name chains absorb more and more of these smaller companies, the competition grows. Earning premiere placement and long-term contracts in retail accounts can make or break those in the vitamin category and beyond.
Marty Gallant is the president and CEO of Natural Product Solutions LLC, a natural products development and manufacturing company. For more information, please visit www.virmaxinfo.com and follow us on Twitter at @VirMaxDS. Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at firstname.lastname@example.org.