Predicting consumer demand and planning effective promotions of a natural product can be extremely challenging, especially for new natural or organic brands. However, this does not need to keep you up at night.
The biggest challenges are inconsistent distribution (items with spotty distribution throughout the chain), inconsistent and confusing merchandising (items not merchandised the ways consumers shop) and inconsistent promotion/pricing. These challenges are dramatically amplified by unsolicited celebrity endorsements (Dr. Oz, anyone?).
Solving these problems will help regulate your brand's supply and improve customer satisfaction. For natural retailers, this means you have consistent messaging to consumers as the go-to destination for "As seen on TV." (Read more about avoiding trouble with Dr. Oz's legal team.)
Here are 3 easy solutions for natural retailers
- Stock top-selling items across the market, in addition to niche/specialty products. This makes your store more shopper-friendly and inviting to consumers. You can then encourage customers to trade up your specialty items.
- Sections should be merchandised the way consumers buy. Mixing segments within a category can be confusing to shoppers. Keep like segments together. For example, don't mix broth and soup. Instead place the soups together in a section where customers can easily compare different brands of tomato soup.
- Stock enough product to support each promotion. Out of stocks communicate that you don't understand consumer demand. Properly plan for and get commitments from manufacturers and distributors to fully support the promotion. Promotions should focus on items currently in stock at every store. Other items should include a limited stock disclaimer in the promotion's ad.
Having the right data can reduce and even eliminate future sleepless nights. While canned reports provide a quick topline overview, custom ad hoc reports can help you grow sustainable sales and help meet, and even exceed, your objectives. Most canned reports don't address these specific business concerns and won't help you in the above situations.
You need reports that provide actionable insights. This is where you might consider hiring a talented category manager—someone with the necessary skills to help you compete with even the largest and most sophisticated CPG manufacturers.
Daniel Lohman is the owner of Category Management Solutions (CMS) which provides innovative strategic solutions for natural and organic CPG companies interested in gaining a significant competitive advantage.