Anna Luhanska, CMO of VARUS, talks about the interaction between manufacturers and retailers, opportunities for cooperation and promotion for a brand of any scale.
Where should a manufacturer start to get into the supermarket and be noticed by consumers among all the variety?
Any manufacturer should start by preparing a full-fledged entry strategy.
Analyse the market, competitors, products, their cost, presentation, and understand your unique offer. This is necessary to make it easier to explain to the retailer so that they know how to communicate the benefits of the product to the customer.
Even before a manufacturer approaches a retailer, it is worth deciding whether it is a niche product that is promoted through uniqueness, or a basic product where demand is generated by promotions? What will be the advertising and budget? It's good to have all the information gathered in a presentation that the retailer's representative can pass on to the relevant departments.
What tools work best for shelf promotion? And does the effectiveness of actions depend on the product?
Yeah, at 100%, I'm always in favour of a combination approach because it works best. A new brand should test different options in practice to understand what works for their customer.
In general, if we are talking about craft or niche products, it means sampling, tastings of various formats. The first purchase is well stimulated by promotions.
Placement is of great importance: a golden shelf at eye level or additional areas - near checkouts, on promotional stands, in islands. This is critical for impulse goods. Our network also has a programme to support new products - we highlight them in catalogues and on social media.
Cross-promotion works well. For example, if a supplier comes in with a sauce, it is best to place yourself next to the meat department. It's important not just to get your product on the shelf, but to think about where people will buy it faster - this is especially important for new products.
How do you negotiate with a retailer?
The terms of cooperation are discussed at the initial meetings: representatives of the supplier and the commercial department discuss logistics, marketing, and bonuses. Usually, we provide a presentation with all the possibilities and a marketing calendar, which you can read before entering the network and develop a promotion plan.
What mistakes do manufacturers most often make when cooperating or entering retail?
Weak control over merchandising. This is difficult for a small manufacturer, but it is very important: the goods must be displayed correctly.
Inconsistent logistics or incorrectly calculated demand. Nowadays, everyone works with auto-orders, but when it's a new brand and it has no history, it's very difficult to make an accurate forecast. So the brand needs to make sure that there is always a transitional balance on the shelf during promotion.
What does a retailer expect from a brand at the start?
Willingness to participate in marketing activities and provide promotions to reduce launch risks and avoid write-offs or large balances.
Guaranteed availability and sustainability of volumes, especially for promotions. And here it is very important that the supplier makes the right calculations and is able to deliver the goods.
Willingness to interact. Any network expects partnership and coherence.
What marketing support can a retailer provide to a manufacturer?
Virtually any kind: SMS and email newsletters about new products, advertising in the catalogue, in the sales area. The main thing is that it should be of interest to our client.
Promotional catalogues have separate support, such as billboards, banners, and YouTube ads.
In the current situation, retailers are more focused on pricing rather than their own brand. We see that price is important for the customer, so we mostly advertise the product.
Are there any specifics of promoting craft producers?
Yes, there should be an emphasis on locality and brand history. The audience is narrower, but has higher loyalty. Personalisation works well: loyalty programmes, presentations, separate websites for a specific target audience. It's also worth participating in special catalogues for festivals, which are now being held by many networks.
For example, VARUS will host a beer festival in July, with craft suppliers participating. And Dnipro brewery MOVA has brewed a special line of beer for this event. During this two-week festival, we will be able to tell you more about the tastes, types of beer and the producers themselves.
What works better for the product, a loud promotion or a quiet but constant presence in the supermarket?
For a well-known brand, it's a quiet, confident presence. When it's an established brand, all you need to do is maintain availability and quality.
But for newcomers, it's a high-profile promotion. If you work properly with marketing, you can collect a lot of important information after the promotion: whether the customer repeated the purchase or bought again without a discount. And those who didn't return can be interviewed to find out what didn't work - the taste, packaging or something else.
Retail is a treasure trove of receipts and customer habits. We have a lot of data on how the customer evaluates the product. For any supplier, we can conduct a survey: whether they have tried it, what is important to them, how they make a purchase decision.
And if you want to start cooperation with VARUS, visit the special Varus Partner website at this link. It is a convenient tool for communicating with commercial managers, where you can leave requests for the introduction or withdrawal of goods from the assortment, communicate with all strategic departments, get acquainted with the schedule of the assortment committee for your category, and plan fruitful cooperation.
Author: Daria Spasova
Photo courtesy of the VARUS network press service