The 30 things (most) Retailers and Category Managers think of when considering new products
When pitching your products to Retailers and in particular Category Managers at major supermarkets, its helpful to understand the different questions that they can ask themselves (not necessarily you!) as part of their consideration around whether to accept your product. This information should be the core of your Go to Market launch plan, and included in your retailer presentation decks so you can feel confident in pitching with your best foot forward. Building relationships and getting ranging is all about TRUST - in your brand, your business and your ‘fit’ with what the Retailer is looking for to drive sales for their customers. Remember that their first focus is THEIR sales, and YOU are part of the ways that they build customer loyalty.
No matter the size and sophistication of the Retailer you’re pitching to - as well as the individual preferences of the buyers - its a great idea to read through below and consider how your brand would be able to answer them. These questions are based off a guide from Foodstuffs South Island, and I’ve expanded out more explanation of ‘why’ each area is important and how you might be able to go about answering them. By having clarity in this, you’ll be putting your best foot forward for ranging success in retail.
RETAILER STRATEGIC FIT
This is the first key part - do customers expect to find your products in their stores. Retailers are laser-focused on meeting their customers needs, and opportunities to get more consumers is always a good thing. Be clear with your retailer WHO your target customer is and WHY their store is the right fit. If you’ve been selling in other stores or through markets, talk about who your customers are and why they will be likely to come and buy the product in their store. Take the time to go into the Retailer store, look at WHO is picking up similar products from the shelf and be able to explain why THIS retailer is the right one for your brand.
How does this product align with what our customers are looking for?
Does this bring in any new customer groups that we don't currently serve?
Will enough customers be expecting to find this product in our stores?
Where else are customers buying this product? Do you sell in other Retailers outside Grocery?
CATEGORY FIT & POTENTIAL
Once you’ve established its the right retailer fit, its time to look at how it adds on to what they are already doing in the category. Unless you’re a rapidly growing totally new segment, chances are that your target Retailer will already have an established set of products meeting customers needs. That’s where you need to start doing your research on the category dynamics with that Retailer. Take the time to look at the shelf, talk to people already shopping the category (both with the Retailer and in other channels), and be clear on your products value-proposition. It can be worthwhile writing a simple comparison on how your product stacks up compared to other options already on shelf, and why yours is a better offer.
How is this product developing/influencing/changing the Category?
Does the product have a point of difference to products already in core range?
Does the product offer anything different to the category? E.g. unique flavour, new concept, format
Is something similar available in other departments of the store?
If it is a different flavour/fragrance, is it different enough to existing offers that it justifies inclusion or replacement?
Adding value to the Category
Bringing in new SKUs and a new supplier is a lot of work, and Retailers want to make sure that they are going to be adding value for all the effort. Plus they don’t want to delete another product that would perform better. Think about where the extra sales might come from - more customers? switching? buying more?
Would this product bring in new sales to the category?
Where will the sales come from? New customers to the category/subcategory, Channel switching, additional purchase to current purchasing habits
Would this product be switched out for current products - lower/ higher price switching?
SHELF PLACEMENT
This is all about WHERE your products should be sold instore (or if online retailer - which categories your products would fit into). They are not going to create a whole new category or space just for your brand… You need to be clear on how your products stack up to competitors, and which are the target products to be deleted and replaced by YOUR product. Shelves are not elastic and your Category Manager needs to work out a complex jigsaw of shelf space to make sure they have the right products that fit. Don’t expect to go straight into prime position if you’re a brand new product, and be clear on which products you’d make most sense to sit alongside.
Make sure your product will fit on the shelf without them doing a major change as well! Changing shelves is a big deal when it comes to planograms as ALL shelves and products need to fit within the constraints of the space instore.
Where is the ideal place that the customer is looking for it?
What products would this replace on shelf?
How and where would it fit on shelf, what would it be next to?
Are there any shelf/ placement considerations eg theft, weight (health and safety)
PRICING & MARGIN
This is increasingly one of the MOST important areas that Retailers are considering, as margins are being squeezed all over due to cost pressures from wages, overheads etc. Having a clear understanding of your full margin model, a solid pricing and promotional strategy and knowing what you can (and can’t) negotiate on are vital for you both to have a sustainable profitable business. Be able to clearly show not only the ideal RRP, but also suggested promotional price (remember - you need to fund this), price per serve/gram, and how it stacks up to competitors. If you’re more expensive, then be clear on WHY your recommended price justifies the premium. This could be ingredients, packaging, brand positioning, uniqueness etc.
How does the price compare to others in the category? How can they justify the price?
What margin are they offering? How does this compare to the rest of the category?
As well as recommended retail price, you MUST know the margins that you’re able to give to Retailers. If you’re going into supermarkets, there are other considerations than shelf margin ie trading terms which need to all be factored into your own margin model. As an example, Foodstuffs provide a spreadsheet 'of trading terms (link below) so you can get a feel for different elements to consider. The margin expectations will be different for every category and segment, so ask your Category Manager what the expectations are and what’s needed to get ranging. https://www.foodstuffs-exchange.co.nz/processes-and-guides/changing-your-trading-terms/ Countdown (Woolworths AU) provide full detailers of their trading terms for NZ and AU through their Partner Hub https://partnerhub.woolworthsgroup.com.au/s/article/Endeavour-Group-Supplier-Trading-Terms
SUPPLIER & BRAND PERFORMANCE
Having a sales history and being able to show how you’ve built sales over time helps to give Retailers confidence that your brands are something that customers want to buy - and worth taking into their stores. This is also where the strength of your process and ability to be a ‘good’ supplier come into consideration. Retail is a complex, fast-moving business and they need to know you can deliver in full, on time, every time. The Retailer is also looking for proof that you are going to invest in your brand through promotional (generally a mix of pricing and instore activity), marketing activity, field support etc. Be clear on your sales history (you don’t need to show them every detail if you haven’t sold with them before), and why you’re a good trusted reliable supplier.
Does the existing supplier & brand performance warrant further range extension?
Does this brand/supplier execute NPD well?
Do they offer promotional support to banners on current products?
Does the supplier have a field team that supports stores?
Have there been any supply issues that could impact future DIFOT and brand growth?
SUSTAINABILITY
No matter what category your product falls into, its important you are able to speak to the sustainability of your product, ingredients, or benefits. Think about how you would position this as it could be ‘less waste, local manufacture, recyclable packaging etc’. Sustainability is a must have consideration for all major retailers these days and it’s important that you’re able to speak to how you’re addressing this with your business.
REMEMBER that sustainability is about more than the physical product - its about what you’re doing from a community, social, environmental and personal perspective as well. This means you might talk to how you’re working with local community groups and driving education, as well as the recyclability or local sourcing of your ingredients.
What is the full life cycle of the product?
Is this more sustainable and environmentally friendly that existing products within the category?
Includes packaging (recyclable or made from recycled, product & shipper), ingredient sources, country of origin, sustainable goals of the company, and alignment with the Retailers sustainability goals. Foodstuffs publish this on their website so you should check before presenting to understand any issues & opportunities. If you are making claims such as organic, check out the requirements for certifications.
Does this product call out sustainability claims? If so, are these viable? And certified?
MARKETING SUPPORT
The expectation is that YOU will do the marketing for your brand to get customers to pick it up off the shelf. It is not the Retailers job to do all the marketing for your products - they have a store FULL of products and its about working together on marketing activity, and showing what you are doing to bring customers into their store. Talk to the Category Manager/ Retailer about what kind of activity that you can do in their store other than just price. Can you do demonstrations? Shelf wobblers? emails to customers? Stores like Pak’n Save are focused on shelf price only so don’t expect to be able to do a lot if this is your target retailer.
What investment is behind this product both in and out of store?
What support will be in place for each banner?
CHECKLISTS, COMPLIANCE AND SUPPLY CHAIN
Paperwork and compliance is key for large Retailers as they need to know that you’ve '‘ticked the boxes’ around regulatory, claims, product recalls etc. The expectation is that you’re able to deal with the scale of a larger organisation and have all the systems, certificates and process in place to be able to service them. Remember - supermarkets expect to have on time, in full deliveries > 98% of the time… being out of stock is a major issue as you risk lost sales, and worst case - deletion.
Have you looked at Retailer checklist for New Suppliers, and checked everything off including GS1, compliance documentation etc
Is there a Supply chain set up to support broader distribution? Have you checked off Retailer requirements ie preferred distributors
If you’re serious about scaling up your business and getting real credibility with Retailers, then having all these components clearly mapped out in your Go to Market plan is critical. While the Category Manager may not overtly ask you every single one of these exact questions, its highly likely that they are thinking about them as part of building the wider ‘trust factor’ for your business before they accept them for ranging.
If you want more help working on your Retailer presentation or Go to Market plan and tackling the above questions, then get in touch.
We can do one-off workshops or have more intense programs with the Regional Business Partner network to help business get Ready for Retail. Get in touch at hello@pitchfork.co.nz
