Creator to Consumer – Market Channels – Retail
Season 2 – Episode 5 –
30 years and still learning - Having spent most of my career post leaving the Royal Navy working in consumer goods, primarily in the perishable food sector. I find it fascinating that I still learn every day, sometimes it’s a reminder of what I have forgot but for the most part, I still learn something new every day… Today’s episode is about Market Channels – Retail.
What is the difference between Retail and Foodservice?
Its more about why they are different and what do you need to know to survive, we will explain Retail here and Foodservice in the next episode.
Retail is about selling a finished product to a consumer, that they buy and take away from the premises, usually taking home to create a meal, or add to a dinner plan.
What are the sub sectors in Retail?
Here are the main sub sectors, driving the volume.
Grocery, Specialty, Discounter, Club Store, Regional, Big Box, Nationwide, Local Deli’s, Online, C-Stores, Concessions (Airports etc.), Vending, etc.
Do I need to take a different approach to each sub sector?
Yes and no, the key different categories in the sub sectors are handled differently and No, the basis of how you sell your product is the same, for example:
For the most part Grocery, Specialty, National and Regional Retail Chains, you will need to have marketing funds available to invest in your brand with the retailer, to gain consumer trial, repurchase and long-term loyalty, which will grow with a long term listing, usually slotting fees, will give you a listing for a minimum of 6 months, depending on sales performance, longer if you product is hitting the hurdle rates.
Whereas Club Stores may want a net, net, price so they can create the demand themselves, using the margin they have built in, however, be aware, the Club Stores may not buy your product ongoing, if your item is on a WIGIG program you might only be in their business for 3 months and then they switch your product out for newer or more seasonally appropriate product. So whatever marketing monies you offer or are asked for, remember to amortize it over the period you will be stocked for.
Discounters, usually just want an EDLC, net net priced products so they can move the product through in volume, no frills or extra marketing investment, sounds attractive but remember, they will sell your product for a low price and this can have an negative impact on your brand and retail position. Unlike working with Grocery Outlets Bargain Markets, they focus on excess and short coded grocery products, they have a few housewares and non-grocery items. When a product is featured in their store as a close out, very often it encourages trial and after sales in other retailers when the product is not available in their stores.
Big Box, such as Target and Walmart, will usually feature your product as an EDLP product, driving the volume by being cheaper than their competition on an ongoing basis.
Online sellers like Amazon usually have an EDLC structure also, maintaining their price point due to the convenience factor.
C-Stores usually have set prices with multi buys to attract a larger register ring for each purchase, such as a Multi-buy or 2 for. BOGO’s are popular, however, it’s worth remembering the latter drives volume and not register value or direct value to you, but can benefit your production costs.
Who does the buying?
Each retailer has a category buyer, they may buy more than 1 category. They are usually officed in the retailer’s head or regional office. One point of contact for the main buying decisions, which makes it easy to manage, there are other contacts that you will need to work with to make sure your product gets on shelf, through the supply chain and featured in the right promotional vehicles to get noticed by the consumer.
Now it’s all clear as mud, need more, please ask.
In our next episode, we will be talking about Market Channels - Foodservice, thanks for reading and continuing your journey from Creator to Consumer.
Interested in reading or finding out more about selling your passion or our Creator to Consumer series please visit our Chatter page at www.beachcitysales.com/blog and click on Creator to Consumer 1 & 2 or our general site at www.beachcitysales.com, for more direct interaction please e mail us at firstname.lastname@example.org
Remember, whatever you know “good luck keeping up”