By Golden Sun Marketing president Don Goodwin
Over the course of the year, I have had the pleasure of working on programs for grower shippers to build sales of their items with specific retailers. Many of the items have some special attribute like high flavor. I have come to one frustrating conclusion – Most retailers are incapable of communicating with their customers in a meaningful way about what makes a product special. Furthermore, I find that very few retailers can execute a plan effectively.
Retailers fail with these programs in many ways. Their limits on signing are too strict. They don’t leverage their full network of promotional tools to build awareness of items. In addition to signing, this includes ads, employee training, social marketing and effective display techniques.
We recently assisted one of our clients as they gained new distribution for an item from a large chain. The retailer was insistent that they had to have the item in a specific geography. Although we were oversold on the item, my client relented. From there, the retailer decided that he did not prefer our version of the signing we had created.
So, we made last minute modifications to the program. Well, you may guess what happened. The product was shipped to stores. We visited stores and no signs were in place. Furthermore, the stores had misnamed the item on display using their in-store signing. Over the years, I have learned that this type of issue is more the norm than unusual. The retailer involved is highly respected and seen as a solid operator.
Another disturbing trends
Another disturbing trend is that companies are giving more stores autonomy to decide what to carry. Each produce manager only has to support those items that he thinks might sell. On the surface, this sounds like it makes a lot of sense as each produce manager should have a real sense of their local market. From my retail experience, I can share that most produce managers are incapable of making an informed decision. Their decisions are based on intuition more than real data. Often times, they don’t have insights to what the supplier may be doing to build the item. They also don’t have a sense of consumer trends.
In the last year, I have seen items fail because it was too difficult to convince several hundred produce managers to get on board. This is how we used to operate 20 years ago. The pendulum will eventually swing back as this process fails.
Implications for exporters and growers
So, what does all this mean to companies that export produce to the U.S.? First, I think you should dig deep to understand how your sales representatives engage with retailers? Do they just sell to the buyer? Are they engaged with the retailer’s marketing team? Does anyone call on their stores?
I would be very cautious launching anything new without knowing the answers to these questions. Second, I suggest starting to build a marketing plan that focuses on the consumer. New items are successful when they are accompanied by a full scale marketing plan that includes public relations, in-store marketing, social marketing and clear brand positioning. Despite the challenges at retail, you can be successful. Part of that solution is communicating directly with the consumer. Through public relations and social marketing you can do this cost effectively. Finally, as you determine how to price your product, focus on the consumer’s willingness to pay for an item. If your item is truly special, don’t think of it like all your other commodities.
Despite my frustrations with retailers, I do believe new, innovative items can be successful. To be successful, you have to control your destiny by assuring you have the right partners. Good Selling!
Golden Sun Marketing provides strategy and marketing services to the fresh produce supply chain from seed to retail.