ST. LOUIS — This month promises to be a good one. To begin with, for the first time in a while, the NACS Show will not conflict with MLB playoffs! That’s a huge bonus in my baseball-loving eyes, as reconnecting with industry friends at the trade show will be distraction-free while uncovering the latest technology, best practices and emerging trends.
The plethora of new items introduced during the show will present opportunities that are endless; unfortunately, space in the store is not. Picking future winners from the long list of new items, without sacrificing proven core products, is a task worth the focus.
Lessons From DSD
Reflecting on the start of my career as a DSD (direct-store delivery) pre-sell salesman made me consider the important role that distributors play in getting these new products to market. Being in stores more than anyone other than customers and retail staff gave me a unique perspective on the challenge of maximizing precious retail space.
Picking future winners from the long list of new items, without sacrificing proven core products, is a task worth the focus.
“SKUmaggedon” is how Andy McCain, president and chief operating officer of Hensley Beverage Co. in Arizona, described the struggle to choose the right new items. “We distribute for over 170 different beverage manufacturers across multiple categories, and our largest c-store chains average 400 of our SKUs,” he told me recently. “My epiphany happened a few summers ago when I volunteered to help our merchandising team during Fourth of July week. Seeing [their task] firsthand crystalized why we had to evolve.”
I spoke with McCain and his colleague Chad Marston, chief sales officer for Hensley, about details of this evolution:
Staffing. In addition to increasing our merchandising manpower, we needed to separate retail account responsibility from management of the brands we distribute. Staffing up so that our team had clear but separate ownership of both critical functions allowed us to better serve the market by selecting brands and packages that were the best fit for the market and retailer needs.
Technology. Investing in these tools helped us to remove complexity. Opportunities or problems at the store don’t present themselves on a regular schedule. Technology with real-time tracking enables our quickest possible response.
Retail Partnering. The key for any new item launch is recognizing that retailers play different roles in the market. This allows us to provide category counsel and resources that are a fit for each retailer.
When it comes to new items, there are retailers whose strategy is to be an innovation incubator. We know that partnering on new items with these retailers is essential. Our account team knows that our brand teams must be fully aligned with these retailers’ expectations for programing support, space allocation, timing and the metrics for success.
For retailers whose strategy is more focused on volume or routine for their neighborhood, we know to bring them items once they become winners with the incubator accounts. These retailers tend to be the most space constrained and bringing in temporary space creators like plug-in coolers, ice bins or suction racks for high potential items can be a good investment.
In all cases we must be certain that any new products we bring are right for them and that we have the capacity to meet demand.
Discipline. Adhering to the pre-established success metrics can be difficult, and you must be prepared to make tough decisions, without sentimental attachment. This minimizes the chances for leaving products that do not perform while still ensuring that a product is not pulled before it has a chance to be successful. Having the discipline to not carry an item from our CPG partners can be as difficult, but we have to trust our knowledge of the consumer market and our retailers.
Strategic Clarity. Retailers that provide clarity to all on what is important and what the measures are put everyone in a position to be successful. It is our job to ensure that our CPG suppliers have the clear understanding of the retail expectations so that they can plan for the appropriate investments for brand engagement, space allocations and promotional calendars.
Closing Thoughts
Whether we are heading to Vegas to buy new items or to sell them, clarity and focus are things we should all bring to the show. Wishing you, and my Cardinals, a great run this October!
Joe Vonder Haar is CEO and founding partner of iSee Store Innovations LLC. Reach him at joev@iseeinnovation.com.
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