GROCERY WARS: The Challenge Of Staying Listed In the Grocery Sector!
This past week I went to my local Loblaws for toothpaste. They devote 16’ of shelf space to this category that features 7 different brands and over 50 product offerings. With so much competition regardless of the category, how do the smaller brands compete and stay listed? According to what I have read and heard; they feel their biggest challenge is getting listed. Though a formidable task, I would suggest their biggest challenge is staying listed in the grocery sector. Especially when:
- Retailers carried 4% fewer products in 2018.[i]
- Brands advertising efforts boil down to three to seven seconds… that’s the amount of time a consumer-first engages with a product on the shelf, the amount of time a product has to appeal and be chosen by the buyer.[ii]
- There is so much noise to purchase.
“Welcome to The Challenge of Staying Listed in the Grocery Sector”
Though smaller manufacturers are contributing over 33% of the annual fast-moving consumer goods growth in Canada[iii], new entrants into the grocery sector face a short probationary period (6-9 months) in which to prove themselves. During the first year, Nielsen estimates more than 85% of new CPG products fail.[iv]
Why is that? Why do new product entrants not connect with the consumer? Here are three reasons why they fail:
- The product does not have a distinct point of differential: Copy cats, do not apply for entry. Products must have a compelling point of difference to get the shopper to purchase.
- Product positioning: Positioning is where your product or service fits in the marketplace. It is a strategic exercise that defines what makes your product unique and why it is better than alternative solutions. Yet many new entrants do not undertake this exercise.
- Poor marketing: New product entrants no longer sell themselves. Brands must have a distinct target audience and educate them on the features and benefits of their products.
Generating awareness is a marathon, not a sprint. It takes time and effort. Contrary to what many may believe, commence your marketing efforts 3-4 months before your product launch, not at the time of the launch. With this in mind here are 3 ways to generate awareness that will assist in staying listed:
- Influencer marketing campaign: The influencer marketing industry is set to reach $10 billion in worth by 2020. One dollar spent on influencer marketing generates on average $12 in earned media value.[v]
- Blogging: Marketers who prioritize blogging are 13 times more likely to achieve a positive ROI on their efforts.[vi]5% of consumers say that a blog adds credibility to a website.[vii]
- Up-date product packaging: Beautifully designed packaging has the power to entice, provoke curiosity and engage. “Brands are delivering recall through ‘experience packaging’ – packaging that stimulates physical engagement to enrich the consumer’s overall experience”. [viii]
Though the grocery sector has being predominantly dominated by established brands, smaller brands are “stealing the spotlight”. As noted by Jenny Frazier, Nielsen, “While small brands often have smaller budgets, they’re more likely to invest in the right level of marketing support for their brand.”[ix]
The grocery sector is extremely competitive. Today, retailers have limited shelf space, but yet so many choices. With limited shelf space and increased competition, the key question that most businesses ask is how do they “Get Listed and Stay Listed”? There is a methodology to achieving distribution and enjoying long-term success in the grocery sector. So, to ease businesses minds, here are the “8 Essential Steps to a Successful Grocery Store Listing”, our free downloadable white paper. If you would like to discuss further how to get and stay listed in grocery stores, call me and we’ll set up a free consultation.
[i] The Story of Tomorrow – Less Can ne More, Carman Allison, November 2019
[iii] It Figures, Grocery Growth Drivers, Grocery Business, Carman Allison, May / June 2019