Expanding in retail can be a gift for a growing brand. More retail locations mean more opportunities to serve existing customers and attract new ones. However, winning in retail requires more than getting on shelves. Once an order is in, brands must also be able to support their presence on shelf and drive velocities. Expanding too fast can be a curse for the unprepared.
Here are five of the top challenges for brands navigating growth in retail:
1. Inventory Management
Emerging brands often encounter new challenges when entering retail for the first time. One of the biggest is inventory and supply chain management. Securing a purchase order (P.O.) from a major retailer is a huge achievement, but it comes with the immediate challenge of order fulfillment. Scaling up manufacturing to meet demand can introduce a variety of obstacles for growing brands.
2. Financial Planning
Before launching with a new retailer or releasing a new SKU, sales teams try to envision the future. How do we expect this product to do on the shelf? How will unlocking this retailer grow our business? Projections are often directional and imprecise, but they do inform many downstream decisions. The more clarity you can build into projections, the better you can budget.
3. Promotional Support
The name of the game in retail sales is promotion. Whether a trade incentive or top-of-funnel media, how are you marketing the product to consumers? Both emerging and growth brands must be active in supporting their retail placements. The effectiveness of omnichannel marketing can often be the deciding factor. Will the brand continue to grow and scale with a key retail partner? Or not?
4. Driving Repurchases
Success in consumer packaged goods (CPG) goes beyond securing the purchase; the goal is to turn first-time buyers into loyal customers. Maintaining relevance in the retailer’s assortment is crucial. Brands must consider their positioning within the competitive set and utilize in-store promotional tactics to drive repeat purchases. Becoming a household staple is the ultimate achievement in retail.
5. Building Regiment
Many mature brands can overcome obstacles with economies of scale. They reap the benefits of consolidated manufacturing. They can leverage finance and data teams to build strategic models. They manage ample promotional budgets. But still, a central problem remains: How to grow sales in-store? For established brands, this is often a question of regiment. How can you introduce new, complementary products to expand use cases? Then, how can you introduce these products to customers in a compelling manner?
Overcoming Challenges
The No. 1 way brands can overcome the challenges of retail is by seeking more clarity. This looks different by stage, but the point remains the same.
For emerging brands, try connecting with advisors who have navigated retail before. Retail is an ecosystem where experience matters. The best person to ask for advice is the person coming back from where you want to go.
For growth brands, data visibility is key. A strong understanding of unit economics will support financial planning, operations and promotions. Beyond that, measuring the efficacy of promotions helps reduce waste and boost performance.
Understanding consumer preferences is important for all stages, but especially for mature brands. When looking toward repurchase and regiment, it’s important to get into the mind of the shopper. Comprehensive shopper insights can provide meaningful clarity in these conversations.
Have you experienced these challenges? How have you navigated them? What recommendations do you have for brands navigating similar challenges?
Samantha Pantazopoulos is the co-founder and CEO of Vizer, the premier retail marketing intelligence platform helping consumer brands drive online shoppers in-store.