Gaining distribution in supermarkets is really hard, and more to the point, expensive.
Supermarkets control the key “choke point” between you as a supplier, and consumers. On occasions when you are pitching a “me too” product, a decision just comes down to the retailer margin and the amount of promotional and advertising dollars that are being thrown at the launch, which both reassures the buyer that you are committed, and offers some confidence that consumers may be receptive. Generally with a “me too” product, you need to be prepared to take something out of your own range to make space, or be able to pinpoint with data an under-performing competitors product that can be deleted.
New products are usually a bit more complicated. For a retailer to put a new product on shelf, in addition to their existing ranges, it is often more than just a simple one in one out decision, particularly if the new product claims to be opening up a new category or subcategory.
In either case, the simple fact is that retailer stores do not have elastic walls, and space needs to be made somehow.
Over the years, I have launched many new products, some category creating products that have been a huge success, and some not so much, and many line extensions of various kinds. However, in the launching of them, I have done hundreds, if not thousands of presentations to supermarket buyers, and found a number of things that should not be said of you are to be successful.
It really is important to recognise that even though you may think your new product is the best thing since sliced bread, supermarket buyers see hundreds a year, and have heard it all before, so your presentation must be sympathetic to that simple fact.
Some of the wrong things to say which have come out of long experience are:
- “Our research says that this product will increase the total size of the mart by $50 million in three years”. You both know that research is usually rubbish, and that everyone lies to supermarket buyers about theirs. If you cannot support the research claims with very solid data, just be honest about it, recognising that even supermarkets buyers cannot tell the future, and be realistic.
- “Our sales forecasts are conservative” See above, and the truth is that the forecasts are usually these days just spreadsheets with autofill, and are really meaningless. Speak more about the assumptions that are the foundation of the numbers rather than the numbers themselves.
- “You are the only chain that has yet to confirm their acceptance and promotional program for this product“. Nonsense. While someone is always last, it will not usually be one of the big retailers. They know you need them more than they need you, so better to honest, although being desperate is also the wrong tactic.
- “XY company, the current category leader is too slow and locked into their ways to react quickly, so we will have this new segment to ourselves for a long period”. Big companies do not usually get big by being stupid, they may be a bit slower than the small guys, but they do know their stuff, and can move quickly when necessary. A buyer will see your confidence as misplaced, and react accordingly.
- “ABC Co do not have the will to risk their cosy positon by innovating” or some similar comment. Denigrating a competitor is a common fault, and should never be done, you just might be denigrating the people who give the buyer his most profitable products, and he will not take kindly to having his stocking decisions being questioned.
- “This product has been protected by patent” More rubbish. Only very few companies have the resources to develop something genuinely new, patent it, then be prepared to spend the megabucks to protect the patent. The last one I can remember is the Nestles cappuccino product in a pouch, a genuine innovation that gave them just a small amount of time before the copy cats arrived. If Nestles cannot so it, you almost certainly cannot, and the buyer knows it, so do not kid yourself.
- “We have first mover advantage“. This is sometimes true, but is may not worth all that much unless there are long lead times involved in equipment. When a new product can be made on existing plant, you cannot usually count on more than about 12 weeks start, after which the copy cats can arrive, correct any mistakes you have made, and capitalise on your investment with consumers to open up the new category. Sometimes it is better to be second mover, and step over the carcass of the pioneer, who gets the arrows in his back. Having said all that, First mover in a genuine innovation does give you a good chance at distribution.
- “Our plant is state of the art“. Retailers do not care much about your plant, so long as their orders are filled, the product is safe for consumers, and moves quickly off their shelves.
There are 40 years experience in these points, some of it painful, but there is no greater (commercial) feeling than seeing a product you have conceived, developed and successfully launched still on the shelves 20 years later, still meeting consumers needs and delivering profits to all concerned.