April 6, 2016
Last summer, KeHE’s Scott Silverman took a hard look at the effectiveness of promotions in the natural channel versus conventional. What he discovered was striking: Conventional chains were offering less of a discount on natural and organic products than many natural stores—yet they were moving significantly more volume. What are these supermarkets doing that independents are not? Silverman and two other experts offer their best ideas for how you can step up your game and make promotions more profitable.
Distributor
Size up the competition.
First and foremost, it’s imperative to gain an understanding of your closest competitive retailers’ everyday pricing: Are they everyday low price? Do they do high-low pricing? Also spend time learning about their promotional strategies: Do they promote deeply? Frequently? What vehicles do they use? When do they execute off-fixture and secondary displays? Then you want to leverage these insights to develop your own strategy and tactics and work with your distributor partner on garnering deals from brands.
Think seasonally.
You should always be mindful of category seasonality. Whether it’s Thanksgiving or summer BBQ season or back-to-school, the goal is to offer tangible solutions to consumers when they are most likely going to buy a specific set of products. You don’t need to discount deeply, but you can leverage seasonality by setting up bountiful, eye-catching displays and endcaps.
Represent all departments in promo materials.
Use your promotional flier or tagging program to drive traffic to each and every department. You want these to offer values—and the perception of values—to your current customers as well as to potential future shoppers. And don’t forget digital. These days, natural products retailers absolutely need a strong digital promo presence—online coupons, fliers, clear communications about deals. If you haven’t yet figured out the digital component, you really need to in order to stay competitive.
-Scott Silverman, vice president of growth solutions and private brands at KeHE Distributors in Boulder, Colorado
Retailer
Create impactful, story-driven displays.
Endcaps should look plentiful and interesting from all sides so that customers coming from any angle will turn their heads and say, “Wow!” Displays also need to tell products’ stories—shoppers just love reading them. In January, we put tart cherry juice on promo and posted signs explaining that it’s high in antioxidants and other nutrients that keep us healthy during winter. We also tell the stories of our 110 local vendors with one prominent display each month and a few tied-in endcaps. This is very important because not many conventional stores carry these products.
Change displays often.
Try to shuffle up displays at least every few weeks. If you’re going to leave an endcap up for a month—and I understand why some retailers do—at least change the look and feel of it. Rearrange the items or make the prominent product a different one than the week before. That way, shoppers will actually look at the display, rather than assuming they’ve seen it already or that a certain item is “always” on sale so there’s no urgency to buy.