April 19, 2021
COVID-19 made 2020 a huge year for e-commerce. Many consumer packaged goods (CPG) manufacturers had to invest big in their online marketing and sales to keep up. Still, no matter what people tell you, brick-and-mortar retail is hardly a thing of the past. While e-commerce enjoyed an increase in retail market share of around 33 percent in 2020, about 85 percent of all retail sales still took place in brick-and-mortar stores, according to the U.S. Department of Commerce (1).
If you’re a CPG startup or a small manufacturer trying to launch a new product, getting placed in brick-and-mortar retail can be hard. Retailers run on very thin margins, and the competition for shelf space is tough. Nielsen reports that in just the past twenty years, the typical number of items in a grocery store expanded more than five times, from 7,000 to 40,000. And those numbers pale in comparison to the volume of products sold in large superstores and on Amazon. If a customer’s eyes chance to land on your product among the thousands of others, research shows your packaging has only eight seconds to inspire the customer to purchase.
Still, the beauty of brick and mortar retail is that search engine keywords aren’t driving the customer’s eyes to one type of product. A customer can walk into a brick-and-mortar store with the intention to buy a different item and be enticed by yours solely on the basis of packaging and value. CPG companies literally spend months trying to negotiate their way into brick-and-mortar retail placements, and it can be a grueling and confusing process. However, if a company gets placed in a major chain like Walgreens or Lowe’s, it can take their business to the next level.
Main Event Digital has hired CPG retail placement experts to help our manufacturer, wholesaler, and distributor clients move through the complicated process of retail placement to get the critical sales growth they need.
At Main Event, we recognize that e-commerce alone is not enough for most CPG brands. At the same time, we know that just pushing to get into a big chain won’t solve a manufacturer’s problems either.
Brick-and-mortar retail is demanding, and if you get into a big chain and don’t make sales within three months, your product could be eliminated from that chain for good. You may also have to pay store “slotting fees” to get placed, and you will start at the bottom of the shelf. If you haven’t built a previous marketing campaign around your placement, no one will know to look for your product. Only good sales and additional months of negotiation with the retailer will enable you to get closer to the coveted eye-level shelf.
That’s why we often recommend that companies start the retail placement process at independent stores and smaller, focused chains that truly fit their brand. This allows CPG manufacturers to develop a greater retail footprint before moving to the big chains, which increases their ability to make the needed sales. We also like to hook companies up with different discovery subscription services directed at their target customers, such as The Tool Chest, Birchbox, or Breo Box.
Before we even approach physical retailers, we test products on niche e-commerce platforms to develop sales metrics and marketing strategy that will impress the brick-and-mortar types. In addition, we know how to pitch products to retail buyers to get feedback on the quality of packaging, branding, and sales potential. Then, we help our client to pivot if necessary.
Most CPG manufacturers start out in business inspired to change lives with their products. They don’t necessarily know how to form a relationship with a retailer, pitch their product in a way that secures them a placement, or even determine how the categories of a retailer are split.
Partnering with the agency experts at Main Event Digital can be a smart move to expedite the growth of your CPG company. Our team has decades of experience helping manufacturers, wholesalers, and distributors to increase sales online and in physical brick-and-mortar stores. With sweeping knowledge of physical retail, we analyze stores and individual departments and leverage our relationships in the industry to provide the evidence that retailers want to place a product.
Once your product is placed in a store, we will manage your retail sales accounts on a monthly basis and advise you on product placement and in-store promotions, as well as pricing and marketing collateral. We will use data analytics to help you drive market share and category performance for both your on-shelf and off-shelf programs, and at the same time we’ll search for your next big distribution opportunity.
Get the support you need to be a champ in brick-and-mortar retail. Get in the ring with Main Event Digital.
(1): https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf
