Tips for Retail Success

From the Buyer’s Perspective: Must I agree to retailer marketing BEFORE they will consider our products?

First, let’s explain what “retailer marketing” means. Retailer marketing refers to vendor-funded marketing programs specific to a retailer. This includes circulars, advertising on their website or mobile app, price promotions, digital coupons and more. See an article on my website about this to better understand what retailer marketing is.

So do all retailers require you to specify which programs you will fund BEFORE they consider your brand? Some will and some won’t. There are no standard rules on this; it varies retailer to retailer.

As if working with retailers wasn’t hard enough!

Sometimes it is enough to tell retailers that you are open to doing vendor-funded retailer marketing and leave it at that. That is enough to get you into the final rounds of consideration.

In fact that is true of most large retailers. They are probably more concerned about you agreeing to markdown coverage before their in-store marketing programs. In my experience at Target and selling to Walmart, you don’t discuss marketing programs until well after receiving your commitment. Sometimes not until your product launches in stores. But you do agree to markdowns and other chargebacks (warehouse allowances, store allowances, etc.) prior to the PO being issued.

In other cases, retailers will want more details about the types of retailer marketing you are willing to do before giving you a PO. They may expect you to fund price promotions such as MCBs (Manufacturer Chargebacks) or provide discounts off invoice (e.g., 10% OI). Or they may ask you to sign up for a circular or digital coupon right then and there. Other retailers may ask you to participate in a pallet program or create a shipper for them. And you have to sign up and commit for these programs before you are permitted to discuss the details of your line.

I find that grocery retailers are the quickest to make you sign up for retailer marketing before giving you a PO. And it’s exacerbated when distributors like UNFI or KeHe are involved. These distributor account managers (similar to sales reps assigned to a retailer) act as a gatekeeper, and make you commit to marketing programs before they will agree to present your line to the retail buyer.

But regardless of what retailers *require* you do, you should absolutely consider funding retailer marketing programs. While expensive, they work to generate sales among shoppers who are already in that store. That is a far easier sales conversion and likely better ROI than trying to get a consumer outside of store to drive to the store to buy your brand. So have a viewpoint for what types of retailer marketing you’d like to do before approaching a retailer. And experiment with various ones to determine the best type of program for your product.

Despite how the rules of retailer marketing varies from store to store, one thing remains true. Retailers will always first consider 1) your sales potential (which includes your SRP, margins, packaging, and fit with their shopper), 2) your general ability to build brand awareness and generate consumer demand, and 3) your ability to execute.

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