Once you've managed to get your product into a grocery store, your work has just begun.
Although a retailer might have agreed to put your item in his store, that doesn't mean you get prime real estate. Research has shown that most consumers believe the middle shelf - or the shelf closest to their eye level - is the best placement for products in a store, and a plurality of shoppers said they were more likely to buy products on the middle shelf than either the top or bottom. Knowing that shelf positioning can have real impact on product sales, it's critical for you to go into negotiations with a retailer ready to fight for the best shelf space you can get.
But if you're negotiating for the first time - or simply pitching to a new retailer - it might be intimidating to stand your ground for fear of losing your deal entirely. But there are several preparations you can take to wow a retailer and maximize your in-store product placement potential.
Here are some tips that will ensure you get the shelf space that will help maximize your profits:
Sell a Partnership, Not a Product
You're the expert on your product, which means you need to use your knowledge to support retailers and make your item successful on the shelf. If you just put your product on a retailer's shelf and never look back, not only will your merchandise fail to sell well, but retailers may not want to work with you in the future. In fact, when asked to rank merchandiser support on a scale from 1 to 10, retailers only gave them a 6.4, according to a PCR survey. Merchandisers who can differentiate themselves by showing retailers robust support through every stage of the business cycle have a better shot of securing optimum shelf space.
Your assistance can come in many forms. Whether it's a marketing strategy, resources to promote the item or simply keeping an open line of communication, retailers who believe they can work with you to effectively sell your product will be more likely to give you better shelf positioning.
In particular, presenting a fully formed marketing campaign is essential for gaining a retailer's trust, according to Inc. If they know exactly how to display, advertise and position your product in their store, a retailer is much more inclined to give you what you want in regard to shelf space.
"You can't go to a Whole Foods or any store for that matter and try to have a discussion with them," Jon Sebastiani, CEO and founder of Krave Jerky, told Inc. "You need to have all the homework done and really have a proposition that can be delivered a yes or no."
Leverage Big Data
Back up your claims about your product using data. Ultimately, retailers are most concerned about whether your product will help their bottom line. Especially for emerging brands that are still trying to establish more clout in the market, demonstrating your product's past popularity with consumers is one of the best ways to earn premium shelf space. You should have information on revenue, how your product should be displayed and promoted in stores and consumer demographics as well as data on any past marketing strategies that were effective.
Perhaps one of the most important parts of the marketing plan you present to a retailer is information on your competitors. You need to show a store that your brand can compete with similar products in the marketplace and that your brand is worth giving up prominent shelf space for.
This means providing statistics on your past sales versus your competitors, and it is also important to showcase information about your current market share in our industry. If a retailer doesn't think you have enough brand awareness to drive sales, they're more likely to deny you a quality spot in their aisles, or worse, give it to one of your competitors.
Make a Long-Term Pitch
Retailers will be more willing to invest in your product if they know you won't abandon them for another store. After they have agreed to sell your product, one way you can sweeten the deal is by offering exclusivity with the retailer for a certain amount of time. You can also agree to develop original products for them in the future, which will give retailers a method to market your product in a way no one else can.
Although this eliminates your opportunity to get into other stores right away, it will provide a chance to build brand awareness, which will give you a significant boost when you're trying to get your product into other stores down the line. And in the short-term, it will build trust with the retailer and increase the likelihood of getting a great shelf location for your product right away.
In order to maximize your revenue, you need to focus on forging relationships with the retailers who sell your product. Developing trust with a retailer will lead to better shelf space, cooperation and, ultimately, strong sales for both of you.
Frank Brogie is the Product Marketing Manager at Repsly. When he’s not thinking about how to position and sell Repsly’s products, Frank loves to explore Boston by bike and hunt for vintage cars through a camera lens. On weekends you can count on Frank to organize a pickup basketball game or play disc golf. An avid podcast listener, Frank recommends Philosophize This, 99% Invisible, and Radiolab.