8 Ways to Drive Retail Velocity
8 Ways to Drive Retail Velocity
Post-pandemic retail is back in a major way for consumer brands. Early this year consumer spending posted it’s biggest gain in nearly two years, an all-time high. It’s no surprise that fledgling brands are all scrambling to get into retail.
Why retail is more important than ever
It’s not because of the rebound in consumer shopping. It’s because of the iOS 14.5 privacy update and impending cookie sunset.
Prior to iOS 14.5, it was easy for brands to grow efficiently solely by running ads on Facebook and Instagram. In the wake of iOS 14.5, Apple devices are no longer passing cookie data to Facebook, and custom acquisition costs shot through the roof.
Obvi founder, Ronak Shah, says, “Brands need retail more than ever, because it brings blended customer acquisition costs down.” As a result, brands are in a mad rush to get into retail.
In general, it’s a risk mitigation strategy. As Jamie Roller, Director of Growth Channels at Dr. Squatch points out, “Amazon can be a tenuous platform. At any point, they can shut you down for unproven allegations of breaking the seller code of conduct.”
Staying in retail > Getting into retail
Getting into retail is no easy feat. Brand founders often invest years and tidy sums in product development, branding, packaging, and direct-to-consumer marketing to prove their concept.
But what most brands don’t realize is that getting into retail is the easy part. The hard work is just beginning when you get your purchase order. There are thousands of brands behind yours banging down the door of the retailer. The scary truth is if your brand is not selling, another will take your spot.
So it’s staying in retail that really matters. And it all comes down to a single metric: retail velocity
Here’s how retailers calculate the sell-through metric
Retailers will calculate it for every SKU in a shelf set, so your product can be evaluated against its competitive product set.
According to Yannis Varrellas, CEO of Olyra, “If you want to be successful and maintain your position, you want to be in the top 25% of your set.”
So it’s on YOU to ensure your brand is standing out and selling through. And earning its spot on the shelf.
We’ve spoken to hundreds of operators and investors on the best ways to drive velocity in retail.
12 tactics to drive sell-through:
1) Collaborate with your broker
Brokers and distributors are key players in the retail channel. A broker acts as an intermediary between the brand and the retailer. They are independent sales agents that represent multiple brands and work on a commission basis. They help with negotiations, market insights, and merchandising.
Phil Jamison from Beatbox beverage shared a tactic for how he works with beverage brokers. He advised that you should focus on your differentiation, “tell them how you are different” and how you satisfy a “highly defined customer profile.”
Furthermore, you should plan on proving metric evidence (taste tests, margins, sales volumes). And show that you have a support system (marketing budget, staff in market).
He boils it all down a tight pitch that can increase your sales 50% overnight.
- We have a great product for this ICP
- We need to focus on the X,Y, and Z aspects of the product.
- Go out there and sell
Ronak from Obvi highly recommends that you find a broker who works on performance, not a retainer basis. And Jake Karls from Mid-Day Squares stresses how important it is to have a close relationship with our broker. His broker was especially helpful with strategy and timing.
2) Get the category right.
This is not so easy for the category creators out there. Jake Karls from Mid-Day Squares shares, “Our snack bars were often put into the dairy set, but it was a vegan and plant-based product that was side-by-side with eggs and milk. Despite being a popular item, it would get lost.”
People would see it, but it wouldn’t compute in their heads because they were looking for something else. Luckily, they were able to do some testing with smaller retailers. Managers would show them the planogram and let them experiment with a new position.
And sales shot up. From there, they could take this data and narrative to other stores to show them it's a win-win move.
Belgian Boys is another brand that has traversed the category switch moving from frozen breakfast to the refrigerated breakfast set.
Pay attention to how and where your product is merchandised in the store. Work with your category manager, broker, and distributors to understand where you will sell best.
3) Optimize packaging.
The packaging that worked in DTC doesn’t necessarily work in stores, because the product is ultimately sold by imagery and copywriting on a webpage. And on the shelf in the supermarket, the product is sitting next to a number of similar products from different brands.
That means being different and noticeable compared to others in your section. Some brands like Tooletries have bold colors and designs, and have a built-in advantage. Other brands, maybe looking for opportunities to tweak their design to make it “pop.
Packaging optimization means different things for different brands. For example, Ronak Shah shared that, “In preparing for Obvi’s Walmart launch means dialing back the focus on flavor and dialing up information about the brand and product.”
Finally, put a QR code on your packaging. A QR code will create a bridge between the offline and online. It will extend the real estate of your packaging and loop buyers into your digital presence. From there the options are limitless. You can:
- Communicate key information (ingredients, food pairs)
- Capture customer emails/phone #s
- Incentivize repeat purchase
4) Out-of-home (OOH) advertising
A prime example of this is Strong Roots, a plant-based dinner side brand. Earlier this year they launched a major OOH ad campaign in NYC.
There were ~450 billboards across 5 boroughs, digital and traditional, above ground and in the subway. The ads feature some of their most popular products: Cauliflower Hash Browns, Sweet Potato Hash Browns, and Spinach Bites with a Buy One Get One Free Promotion. 🎁
To redeem the freebies, subway riders scanned a QR code and provided their email address. The coupons are delivered in real-time and can be redeemed at Whole Foods, ShopRite, and Fairway, as well as online at Fresh Direct and InstaCart.
Another recent innovative OOH example is a truck wrap from Jolie. Jolie, the hot new shower head for skin care wrapped trucks featuring a QR and drove around New York City. Check out Adgile Media, for high-tech truck wraps that can track buyers who stop in major retailers who see the truck and deliver a targetable audience for Facebook and Instagram.
Jolie also went grass roots with their QR codes with branded stickers that they left in New York City restaurants, clubs, and bars. This is a more affordable option for brands that can’t afford a billboard or truck wrap.
3) In-store demos
“Cans in hands”. As a new brand entrant in a crowded space, it’s not easy to unseat a household stable. Having a representative in-store sharing out samples is a must, because most shoppers won’t switch brands unassisted.
For new categories, it’s mission-critical to run sampling and demo programs, but buyers will have questions about how to use the product and pair it with foods.
Many brands use 3rd parties, but Pricklee cactus water is a brand that realized in-store demos were the least capital-intensive way to get as many cans into as many unique hands as possible.
The more people that try the product, the more word-of-mouth spreads among their key demographics.
Kevin Wong from Lunar, the craft hard seltzer brand also is a big fan of demos. One time Kevin was able to sell 36 units in an hour and a half.
That was the entire stock at Whole Foods. It was a great opportunity to say, “Hey, you need to buy more of this!”
The double whammy benefit?
You also get to hear customer feedback in real-time.
Consider using a QR code for CRM list growth while you are sampling - or offer a digital rebate to incentivize immediate purchase.
5) Have a store locator map on your website
Pretty straightforward one here.
You want to help your customers find you in a retailer near them. To do that you need a store locator map on your website. It’s where a potential buyer can put in their zip code and find the nearest store with your product. It’s a must-have tool.
Use all of your channels to remind people about the store locator!
5) Leverage your CRM contacts
Hat tip to the amazing Nik Sharma for this tip excerpted from his WorkWeek newsletter.
You probably already have an audience built out in Klaviyo, Postscript and/or Tapcart, that you’re regularly communicating with through emails, texts and push notifications.
Within your existing lists, you can segment prior customers by location and send targeted blasts with unique offers to drive foot traffic to a nearby store. The trick here is to have an offer. What’s the incentive that’s going to get them in the door? It could be:
- A discount
- A new colorway
- A Venmo payment for uploading their receipt (via Brij SMS)?
I remember when MVMT Watches launched in Nordstrom, and they needed to demonstrate they could drive sales, they marked their best-selling SKU as “Sold Out” on their website and emailed people to go buy it from Nordstrom instead.
5) Use social strategically
Social media is a bullhorn to tell your followers WHERE they can buy your products. Whether it’s with influencers or owned channels, repeatedly remind them where they can buy.
Jake Karls of Mid-Day Squares is a social media genius. He’s built a massive following across Instagram and TikTok organically. He and his team will grab pictures in front of retail locations and share with their audience all the time. Jake also works with regional influencers to call out Mid-Day Squares in local retailers.
Celebrity-led brands have a unique advantage here. For instance, De Soi is able to photo shoots with Katy Perry in Boisson and share them with her massive following.
Another tactic Nik Sharma calls out in his newsletter is running targeted paid social on Instagram and Facebook. You can geotarget ads or buy audiences from Oracle, Rakuten, Nielsen IQ, or Polygon. When buying from these vendors, you can ask for audiences in “New York Metro who shopped at Target twice in the last 90 days.”
6) Use discount promotions
Most retailers have their own couponing programs that drive promotions and sales. Platforms like Ibotta help buyers discover you and offer digital coupons to them to drive them to stores.
Rebates offer an easy way to help encourage purchases and first-time buyers. While minimizing the red tape required for some couponing programs.
Ronak from Obvi tested an ingenious discount strategy that helped protect and maintain DTC sales. When he launched in Vitamin Shop, the packaging featured a points promotion that gave the customer 500 points (or $5) off an online purchase. Obvi is about to launch in Walmart and is getting ready for round #2 of this strategy.
Brij’s new rebate product can help you run a rebate program. All customers need to do is upload a receipt and Brij’s AI will verify the receipt and deliver a payment via Venmo or Paypal.
7) Focus your resources and attention
No doubt, getting into a reputable chain is an exciting moment, but it’s also daunting. Going chainwide means you will be selling in a lot of stores!
- Walmart: 4600+
- Kroger: 2700+
- Albertsons: 2200+
- Target: 2000+
- Publix: 1300+
- Whole Foods: 500+
You don’t need to go chain-wide right away. Namek Soltan from GNGR labs focused on the New York Metro area. Building category leadership in a critical geography, gives you the data story and credibility to expand into other regions. Namek shares, “It’s better to be #1 in a single region, than to be #55 across the whole country.”
And when you do go chain-wide, don’t boil the ocean and try to win every store. Focus on the top 10-20% and improve the performance in those stores. Overinvest in all of the activities we described above. “Dominating those top-performing stores is a proven path many brands have trodden before.” says Noah Gray CEO of ONDA, the tequila spritzer brand.
8) Build your data story every step of the way.
Use retailer, broker, distributor, and 3rd party data like Spins to understand your metrics. The data will tell you so much:
- Where to focus your retail launches
- Where to focus your promotional fire power (influencers, displays etc)
- How to optimize your distribution to avoid out-of-stock situations
- Which products are crushing
- Which products to cut before the retail cuts for you
- Switch to the right category
- Help you sell into future retailers
Jess Cervellon from Feastables is also extracting valuable customer feedback data right from the Feastables packaging. With QR codes, Feastables is linking to digital surveys about the shopping experience, product taste, and demographic information. With that information they are improving their retail presence and product development.
Adam Bremen from CanDo stresses that you need a data story every step of the way. And that you create a data story in one retailer to be able to enter the next chain, and the next one. And so on. Your retailer is busy, so it’s on you as the brand to show them the data story and your value.
Time to crush it in retail
If it’s not already apparent, you need to be in retail to survive and thrive as a brand in 2023. Above we dished out a ton of great insights from our guests on the Omnichannel Marketer podcast.
We are here to help. The Catch 22 with retail is that it’s an enormous distribution channel, but you have no way to know who is buying, and no way to engage. Brij QR code experiences help brands extend the real estate of the packaging and drive online engagement resulting in valuable data collection and selling opportunities across channels. If you are seeking more inspiration for how to use QR codes check out our QR Code Examples database or find a time chat with us here.