It’s that time of year again, time for Global Pet 2020. New products will be showcased, networking will commence, and 2020 business conversations will continue. After spending the last few years walking the floor as a buyer, I have heard hundreds of pitches and evaluated thousands of products each year I attended the show. However, the number of these conversations that left a lasting favorable impression is significantly lower. So, what is going on in the mind of buyers today and how can brands stand out?
3 things top of mind for buyers right now
Retail in total grew during holiday 2019, and the pressure is on.
The 2019 holiday growth celebration is over, and no one will be taking their foot off the gas. Now, all eyes are on 2020 and how to maintain the growth trajectory. Buyers will be getting peppered with questions from internal stakeholders like, “Will the momentum continue into Spring 2020,” and “How will the 2020 holiday season exceed 2019?”
Now, imagine that you are a buyer who didn’t drive growth when the total retail sector grew. This would mean that market share was lost… shifting share to the competition. The questions from internal stakeholders will be even more pointed and include, “When will performance improve?” and “How will growth be achieved?”
Regardless of whether the buyer’s business grew, tactics for Spring 2020 are being quickly reviewed again while sales plans are being evaluated for additional opportunity. Simultaneously, strategizing for the 2020 holiday will begin. Both put pressure on buying teams to increase performance.
Private label is still on the rise.
Retail Dive reported that private label sales are growing four times faster than national brands. Sure, we all know that private label is growing, but hearing the actual comparison can be shocking. Let that sink in a minute. Four times faster. When I was a buyer… who was also tasked with growing private brands… my national branded partners heard this initiative as a “margin grab.” However, this initiative is backed by more needs than that.
For retailers, private-label brands remain a viable answer to rising competitive threats. Threats come from competitive pressures and changing consumer purchasing patterns. New competitors emerge, retailers add new categories, online continues to pressure prices, and some retailers face the threat of store count base consolidation. More change comes for retailers as purchasing power shifts across generations, purchase channels expand, and consumer spending patterns redistribute across experience, services and product. And I’m just describing the general retail landscape. In the pet market, these competitive threats for retailers are more exaggerated.
This leads to retailers leveraging private-label brands to compete. While there are costs and investments involved, this strategy can help a retailer offer exclusive products, own their differentiated innovation, drive consumer loyalty and provide value. Not insignificantly, growth in private brands can also drive the bottom line, which under growing financial pressure, is also critical for retailers.
One thing remains unchanged about buyers, the need for growth.
Almost everything in retail is changing, but let’s not forget, all buyers need to grow their business. While the other two reminders are top of mind today for retailers, this one is evergreen. Buyers are looking for products, strategies, concepts that will connect with the consumer in a way that drives sales growth either short term or long term.
The fastest way to get a buyer to add your product to their shelves is to communicate your product’s ability to grow the buyer’s business. As I think through the thousands of products I evaluated and hundreds of product pitches I heard, the one thing the failed pitches have in common is the lack of incrementality communicated as part of the pitch process.
3 tips to improve your Global Pet 2020 conversations
Know the market and the competition.
Buyers are under pressure. The pressure to keep growing and stealing market share, or the pressure to change the business trajectory. Keep this top of mind. This pressure can create an opening for brands.
Brands that have multiple retail partners know which retailers experienced growth in the category and likely have seen market share reports that map out performance. This information is valuable to your retail partners. Partner with your retailers to build a plan to grow by identifying which of their competition is winning. Think outside of the box with your tactic suggestions. With increased pressure from internal stakeholders comes some openness to try new things. This will catch your buyer’s attention and make your pitch or plan for your brands growth resonate.
If you are a new product looking for launch partners, this can be an opening for you as well. Know the market and know the retailer’s competition. As you formulate your pitch or meeting agendas with potential retail partners, think through how your product will help the retailer compete. Market and competitive insights are valuable to retailers and provide useful information to utilize as strategies and tactics are completed. Providing added value will improve your chances of getting on shelf and building new retail partnerships.
Have an answer for private label questions.
As a buyer, the majority of the time I asked a vendor if they were open to discussing private label partnerships, more often than not, there was a pause or deep inhale. From my experience, most brands don’t want to be a private label supplier as a first choice. As you formulate your answer to this question — that I can almost guarantee you will be asked as least once — keep this in mind.
You don’t have to say “yes.” Growing private label business does not mean all vendors are out. Very few large-scale retailers have moved to a private-brand-only assortment. While growing private label is a means for retailers to meet competitive threats, national brands need to keep sight of the real goal for retailers: To convert consumers with an optimized assortment mix to drive top and bottom-line results. Consumers are the ones choosing what products sell, regardless of the retailer’s desires. As long as a brand name matters to the consumer, the brand will matter to a retailer.
But… you might be a better fit as a private label supplier. Take an honest assessment of your strengths evaluating whether or not you are investing to build a national brand. Are consumers demanding your brand? Is your company’s strength marketing a product and brand to a consumer or are your strengths aligned with making great, innovative product? To be clear, there are plenty of opportunities for national brands to launch, grow, and steal shelf space, but there could be more opportunity to partner as a private label supplier.
Total sales opportunity and incremental sales opportunity are different and resonate differently with buyers. Sales opportunity refers to how much in annual sales the retailer can expect to be driven by a product, while sales incrementality is the sales impact to the total business considering the balance of product on shelf.
As you prepare for GPE, keep in mind that all buyers are looking to grow. How is your product uniquely suited to help achieve that goal? Having strong consumer insights that support your incrementality assessment will ensure that the buyer audience finds you credible and understands exactly the importance of the product being discussed. Don’t hesitate in demonstrating your understanding of the consumer. All product pitches include product features and branding, but the best pitches included details on sales incrementality potential backed in consumer insights.
Don’t forget, your time with buyers is short on the trade show floor! Buyers have a lot of meetings and booths to visit. Global Pet Expo 2019 had over 1,100 exhibitors limiting the potential time for you as an exhibitor to interact with all your potential retail partners. All it takes is a few productive conversations to make all the trade show effort worth it. Good luck and have a great show!