Consumer brand builders’ angst is over the top every year at this time. As the New Year begins to unfold, so do the corporate retail decisions about what products will remain in their stores and what the new shelf schematic (also known as the “official set”) will look like for the new year ahead.
Will your product make the cut? Will your product’s authorized shelf position improve or hurt your brand’s recognition, accessibility, and sales? Consumer brand builders are painfully aware of the critical nature of these January and February decisions. They can make or break your brand in any chain or box store. Consumer brands especially are only as good as their products. If your product is no longer there, neither is your brand!
Category buyers are under tremendous pressure to maximize sales and profits from their precious shelf space. Their decisions are critical to their survival as well. So what are the criteria buyers use to make these choices and what can brand builders do to get on the shelf, stay on the shelf, and get better position?
By the time the decisions are made, it all comes down to last year’s sales numbers. Simply put: how were your sales last year in that store; how was the rate of growth; and what was the store’s profitability for those sales? How do they compare with other branded products of the same type, and how are those products trending nationally?
Buyers can’t afford to wait for your perfectly good product to “take off” due to the limited amount of shelf space available. If it doesn’t show its stuff rather quickly, your new product will be discontinued. This is why it’s vital that you show immediate and increasing sales for any product you are fortunate enough to get on the shelf. The buyer may put your product in because of your national scan rating, but your product won’t stay there if it doesn’t sell well.
Consumer brand builders have the entire preceding year to save their brands by making those numbers justify the best positioning in the new sets. This means a disproportionately more intense marketing effort for new shelf placements. If your product gets a coveted shelf position, it means that ten or more didn’t! It also means that some other product was cut out of the set! Keep that in mind for next year! Do all you can do to make sales happen with all your new placements so you can make the cut next year. Special pricing, excellent signage, co-promotions, quantity display offers, and community outreach are all required to secure your precious shelf space.
But wait, there’s more! So you made the cut and you are there for another year. Now your concern is about your positioning. Just a small move from eyelevel to floor level, for instance, can devastate your brand. Your position in the set relative to competing brands at similar prices can also make or break you. Known as “adjacencies,” you don’t want your brand to be sandwiched between two similar brands of lesser price. Ideally, you want to be between two similar brands of greater price.
Then there’s the placement of your product in the set from left to right, with left side of the set generally the more desirable. Lastly, there’s the type-set versus the brand-set. The type-set is where the buyer chooses to segregate all products by their type and groups the types, regardless of brands. This hurts a new brand because it diffuses the brand image throughout the set. The brand- gets you the “billboard” effect buy grouping all your products in one place. Grouping by brands regardless of type always favors the new brand, which is then easier to discover.
So Happy New Year! Here’s hoping you make the cut, get higher-priced adjacencies, and get eye-level on the left side of the shelf in a brand-set!
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders
