I am coming off a seven-month project working with an assortment planning team for a massive publicly traded retail corporation. Reflecting on this time, I am reminded by just how much evolution is happening in retail right now. The changes this particular company are putting in place to reshape the line reviews process will ultimately strengthen buyer decision-making by infusing more data and analysis, delivering a dramatic impact on the top line sales, as well as productivity and margin. While this is great for the retailer, these changes will also have significant implications for all brands and manufacturers on their shelves today or hoping to be on the shelves soon.
While this is transformative to this retailer, this is now more the norm vs. the exception. More and more retailers are overhauling their assortment selection process. As a result, getting on shelves and staying on shelves will continue to be harder. Brands will be expected to rise to the challenge. So, in effort to help you prepare, I thought I would share some tips for brands and manufacturers as you strategize for your upcoming product line reviews using my latest project as a case study.
Tip 1: Remember the goal.
Part of my scope included teaching the assortment planners how to present their recommendations to leadership and merchants. I will tell you the same thing I told them. When preparing for your meeting, always start your prep work by reviewing the goal. In category management businesses, the goal of the line reviews process and subsequent supplier meetings is for buyers to develop a go-forward business strategy that aligns with the category’s role. The strategy development will guide all tactics including assortment selection, inventory management, and pricing decisions… most of which will also be determined during the line review process.
I share this because in my experience, brands can lose sight of why a buyer is taking your meeting during the line review process. Often, brands spend their meeting time focusing only on which of their products the buyer should add and the cost/trade support that accompanies the selection. While this is part of what happens during a line review, you can easily miss the point.
The buyer is collecting information to build their strategy — a strategy that may or may not include your brand on shelf. This is your time with the buyer to share insights, information and learnings that influence the business strategy for the category. Do not waste your valuable meeting time by only focusing on your new and dropped items.
Tip 2: Retail decisions are made by data.
As you are sharing your recommendations to the buyer on building a winning strategy and the corresponding assortment modifications, don’t forget to build your business case. My case study retailer has been evolving their line review process not just to reduce speed to market but to build localized, productive assortments, and they need their brand partner’s help. Part of that evolution is adding assortment planners to infuse more data, getting to a deeper level of analysis.
You might be thinking, how are you going to mine your retail partner’s sales data to get deeper and/or new insights compared to the internal teams? Keep in mind that data equals information, not just numbers and calculations. While your retail partner may have a grasp on historical sales, margin and inventory, they have fewer information sources on what is happening outside of their stores. This includes information around market share, competitive analysis and consumer behavior.
This is not a recommendation of “more is more.” There is a limit to the amount of data you should share. Curate your content, share what is actionable and de-prioritize information that is only interesting. This should go without saying, but you would be surprised at the number of brands that I have met with that don’t follow this logic. Make sure that your recommendations are supported by the data you share AND make sure you have recommendations for the insights you provide.
Tip 3: Expect more challenges from your buyer.
Expect challenges on brand relevance. As your buyers receive more data and insights internally and from your competition, expect a more active dialogue about what is best for the business. One of these challenges will be around the importance of your brand to the category. Private label is growing across all retail and this case study retailer is no exception. Additionally, assortment rationalization always involves removing assortment duplication, and that could be removing brands that meet similar consumer needs.
Expect pressure on costing. A significant portion of US imports were impacted last year by tariffs raising the cost of goods sold. Some of those cost increases were passed from supplier to retailer, creating margin pressure and/or increasing prices to consumers. As such, there will be more in-depth costing conversations now with the elasticity learnings. Additionally, as the flow of data improves internally for retailers, so does information around commodity pricing, cost components, exchange rate, etc. Retail teams are more informed on cost and quality of products. While this will make for tough cost conversations and elevated expectations for suppliers, the quality review aspect of this information levels the playing field.
Buyers are expecting new ideas. New ideas can be new products, but be careful, “innovation” has to be one of the most overused words in the assortment selection process. As you share innovation and new product options with buyers, think through the product change impact to consumers when determining if your product is innovative in the category:
- Is the new product enough to make consumers want to replace their existing product and buy a new one?
- Does the new product solve a new problem for consumers or an existing problem in a better way?
I am not saying to refrain from presenting a new item that doesn’t quite meet the definition of innovation. I am saying, keep this in mind as you build your recommendations. Also, remember that new ideas can come in more ways than product. Innovation can be inventory management, shipping, pricing, merchandising, packaging, etc. Think outside the box and bring new ideas to your meeting.
In addition to my tips above, also remember what all buyers have in common. All buyers are competitors trying to grow their businesses. Buyers compete for market share and consumer loyalty. Keep in mind your buyer’s drive to beat their direct competition as you prepare for your line review meetings. Share ideas and intel that will help your buyer achieve their goal. If you want a lasting partnership and a successful line review meeting, help your buyer strategize to win!
Not sure if you’re ready for your next line review meeting? Want more dialogue on what to expect? Let’s connect.
Before joining Callahan to lead retail strategy, Kristin was senior director of merchandising at PetSmart and director of planning and distribution at PayLess ShoeSource. Her previous experience informs her broad range of retail expertise: buying, financial planning, in-store customer experience, pricing, inventory management, shelf allocation, space optimization and more. Kristin now helps brands with retail strategy creation, assortment building, merchandising, pricing and promotions across brick and mortar and e-commerce channels.