In the ever-evolving realm of retail, where trends shift, consumer behaviors change, and competition intensifies, staying ahead of the curve is crucial for brands vying to secure a prime spot on physical store shelves. In this blog, based on a webinar hosted by Women in Toys, Licensing, and Entertainment (WiT) and The Genesis Company, we'll delve into the intricacies of navigating the dynamic landscape of physical retail. From the pivotal moment of securing a purchase order to the ongoing challenges of maintaining success once on the shelf, these key takeaways will provide a strategic roadmap for brands seeking to thrive in the fiercely competitive world of physical retail.
The Foundation: Securing that Coveted Purchase Order
Securing a purchase order serves as the golden ticket for brands aspiring to carve their niche in physical retail. While a stellar reputation and financial viability are significant, driving foot traffic and enticing consumers into the store are prerequisites for obtaining that coveted purchase order.
However, the retail landscape's evolution introduces additional criteria, including Diversity, Equity, and Inclusion (DE&I) initiatives, sustainability efforts, market share gain potential, exclusivity, and gross margin percentage. Brands must align with retailers' publicly stated goals and differentiate themselves by showcasing data-backed strategies contributing to the retailer's success.
A Sneak Peek into the Retailer's Mind: Earnings Calls
One way to better understand retailers’ goals is to tune in to their earnings calls. These calls provide a direct line to the retailer's strategies, initiatives, and focus areas. Actively listening and aligning a brand's offerings with the retailer's goals grant a competitive edge in securing a purchase order. Additionally, mirroring the retailer's language and communication style enhances the chances of building rapport and understanding.
The Changing Dynamics: Retailers' Evolving Relationship with Brands
The past several years have witnessed a pivotal shift, redefining the retailer's role. Unlike the past, where retailers actively launched new brands, the contemporary approach is to host the best brands. Direct-to-Consumer (D2C) strategies have gained prominence, emphasizing the importance of building relationships with customers, fostering brand loyalty, and leveraging data to understand consumer preferences.
Acknowledging the impact of e-commerce is crucial, with 83% of brands being researched online before in-store purchases. Brands need to optimize their online presence, utilizing social media, user-generated content, videos, and keyword optimization to capture consumer attention and drive online engagement.
The Product-Consumer Tango: Decoding Consumer Behavior
Understanding consumer behavior is essential for a brand's success, both online and in physical retail. The symbiotic relationship between product quality and strategic marketing is underscored. While a great product is crucial for repeat purchases, strategic marketing is what entices consumers to make that initial purchase.
With consumers increasingly relying on online resources for product research, the importance of influencer marketing and user-generated content is growing. The statistics paint a compelling picture – a $14 billion global influencer market in 2021, with 50 million self-proclaimed influencers. Brands that harness this trend tap into the authenticity and trust associated with user-generated content.
Unlocking the Retailer's Scorecard: The Significance of Digital Experience
When it comes to the in-store experience, digital penetration remains of utmost importance. Retailers often rely on “scorecards” to gauge the viability of a brand in stores. These scorecards outline specific requirements that, when met, enhance the brand's visibility, relevance, and strengthen the brand-retailer relationship. Achieving a high score, often 80 or above, is crucial for maintaining shelf space and building credibility.
A brand’s digital presence, an often-overlooked metric, comes into play with these scorecards. Brands are urged to understand the percentage of sales coming from the online channel, allowing for strategic planning to ensure products are optimized for both physical and digital shelf spaces.
Maintaining Momentum: On-Shelf Success Metrics
In the post-purchase order phase, the focus shifts to the metrics and strategies brands must adopt to ensure continued success on the shelves. Productivity per foot emerges as a key metric, emphasizing the importance of each inch of shelf space generating substantial sales.
Consumer engagement remains at the forefront, with experts stressing the perpetual need for reviews, social proof, and an active digital presence. Success metrics encompass factors like the recency and volume of reviews, star ratings, and strategic technology utilization to generate more reviews.
Adaptability in Action: Leveraging Planograms
Brands are encouraged to align their product offerings with seasonal demands, recognizing that consumer preferences and shopping behaviors vary throughout the year. This is where planograms come in — a diagram showing how and where specific retail products should be placed on shelves. While planograms are often perceived as constraints, they can present opportunities for brands to strategically position themselves based on seasonal trends and consumer expectations.
The significance of pricing strategy is highlighted, advocating for entry-level price points while cautioning against extreme discounting. The delicate balance between offering affordable options for new customers and preserving the brand's perceived value is emphasized.
Simplifying the Retailer's Burden: Facilitating Ease
It is imperative to make the buyer's job as easy as possible. Recognizing that buyers are inundated with tasks, brands must streamline processes, providing easily digestible information that aligns with retailers' needs.
Navigating the Future of Physical Retail
With a keen focus on consumer behavior, evolving retailer dynamics, and the ongoing need for adaptability, brands equipped with these strategies are poised to navigate the complexities of physical retail and emerge successful in an ever-changing market. Unleash your brand's power, maximize its potential at the shelf, and navigate the future of physical retail with confidence.
This blog is inspired by WiT Webinar “Unleashing Your Brand’s Power: Maximizing Potential at Shelf”. Watch it on WiT’s Video Library