Large Supermarket or Local Grocery Store, Product Placement Is Key To Sales And Profit.
This post looks at product placement strategies, including how to get new products into stores with the placement you want.
There’s a genius to the way supermarkets and grocery stores are planned (at least there is for the more successful ones).
As consumers, we shop our favorite stores fully aware that, as a general rule, product categories are grouped together for our convenience. For example, the cereals are all together. Dairy products share the same general real estate. However, truly effective product placement strategies go well beyond the basics, and understanding the ins and outs can help supermarkets increase sales, and give a new brand trying to win that vital shelf space a better shot at success.
Planograms – How supermarkets map out placement
When grocery shopping most of us remain happily unaware of the planning that goes into stocking and merchandising those shelves. But store shelves are meticulously mapped out to both maximize space and increase sales. How it’s done is called a planogram.
Think of a planogram as a completed puzzle that fits all the pieces (products and displays) in the right place to paint a big picture of the store. Everything is taken into consideration. Which products go on which shelves? Which products enjoy placement at eye level, and which are relegated to that dreaded bottom shelf? Is a new brand placed at the front of the store or is the brand tucked away in the rear of the store?
There are many factors that go into deciding where a brand and its products will get placement inside a market. Understanding how things work is a big advantage for brands, especially new ones, trying to convince grocers and supermarkets why their products deserve prime placement.
Product Placement Strategy
First, let’s talk about the ways markets and supermarkets leverage their square footage to maximize sales. Certainly, this means making navigating the store easier on shoppers. But it also means tapping into their impulses; reminding them of a brand or product they should buy that’s not on their shopping list; wowing them with a delicious new flavor or an exciting new collection of items. Let’s face it, few of us customers stick to our lists once we find ourselves weaving between store aisles and shelves. So, what are the secrets grocery stores and supermarkets use to grab our attention? Here are two big ones.
Cross merchandising is a marketing strategy that pairs related products on the same shelf or display. The point is to convince consumers that when buying one of these items, they also really need to buy the others. For example, you always see spaghetti sauces on the shelf right next to the pasta; peanut butter and jelly are adjacent to breads; salad dressings are next to the fresh produce. You get the idea.
The king of cross merchandising strategies might be the marketing display. For example, come springtime many supermarkets will feature a “backyard barbecue” display featuring must-haves like charcoal, lighter fluid, hotdog buns, chips and dips, and plasticware all on the same endcap or display.
If you’re representing a brand or product, it might be a good idea to talk about cross marketing possibilities with the store owner or manager. It could be a win/win – helping you get valuable shelf space and giving the grocer a new way to move the other products featured on the display.
Eye Level is Buy Level
This grocery credo has been around for as long as there’s been product placement. It’s pretty self-explanatory. Products that sit at eye level have a much higher likelihood of been seen, and thus, purchased by customers. So it should come as no surprise that placement on shelves at eye level is the most valuable real estate in any market or supermarket. It’s also the most expensive, which leads to our next topic – how does a brand secure the best product placement?
Best Practices for In-Store Product Placement
The hard reality is that your brand is probably going to be asked to pay for placement through something called slotting fees. Essentially, these are upfront payments made to grocery stores and supermarkets to guarantee a brand the placement it wants.
Dealing With Slotting Fees
Many of the nation’s largest grocery chains and big-box retailers require brands to pay slotting fees. However, there are a few secrets that may help you get around paying them, or, at the very least minimize the hit to your budget.
Data That Shows Potential
Intelligent data technologies are improving the way brands understand their markets, customers, pricing, brand identity and sales engagements. Using these advanced data tools brands are able to show decision makers, whether a store manager or marketing executive, insights into the sales potential of a product grounded in real-time and highly accurate data.
Negotiating Shelf Placement
If you have an impressive data story, leverage it to eliminate or reduce those slotting fees. Here are some things you can try to demonstrate to grocers and supermarket chains.
1. Your product is affordable to carry
One reason retailers charge slotting fees is to offset the management and logistical costs of stocking products. Show them that carrying your brand is not as costly as they might have thought, and you have a good chance of lowering slotting fees.
2. You have proven marketing and sales strategies
This might be harder for new brands, but, if you can show an established precedent of strong sales data, it will certainly provide a bigger comfort zone to supermarkets and retailers considering your brand and products.
3. Your product is totally unique
Is your product something that no other brand offers? Can you show retailers that your product will bring new opportunities to sell because there’s nothing else on the market quite like it? That’s a good story to tell.
Product placement is make or break for both grocers and brands. Supermarkets have to plan shelf space in ways that lead to sales and customer satisfaction. Brands must convince retailers to order their products and place them in ways that provide every possible sales advantage.
Data is a sort of fulcrum in all of this, balancing the demands of supermarkets with the needs of brands. If you’d like to learn more about retail data solutions and how they are driving performance, visit www.mobileinsight.com.
Mobile Insight® is the only retail and merchandise management solution designed to meet the brick and mortar sales challenges of high-value brands and retailers. Unlike hardware and software providers that focus on fast-moving goods, the Mobile Insight® platform delivers assisted sales solutions for more complex, interactive, and customer-centric environments. Combining data from in-store systems, 3PLs, employee and partner activity, Mobile Insight® enables informed, smarter decisions that drive sales and operations excellence. For more information, visit www.mobileinsight.com.
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