Secrets of successful retail promotion

Ami Bhansali is the Founder & CEO at Chai Diaries based in Mission Viejo, California. Chai manufactures and co-pack teas for food service, white label and retail.

In a recent post on LinkedIn, she asked:

Here’s a question for small CPG brands in the food space… which has been your best performing retail promotion?

  • Demos?
  • Cents off?
  • Partnering with platforms like Instacart?
  • Anything different?

A lot of small brands who have “finally” made it into a retail chain soon find getting in was just half the battle won! Staying on-shelf is the real challenge! With not too many marketing dollars to invest upfront… what could be a smart strategy in your opinion that could create a buzz?

Let’s help fellow start-up brands who have made it onto the shelf on pure grit!

Her post generated 30 comments. Most of this discussion is relevant to kombucha brands, particularly those in the United States.

Here’s an edited summary of the comments:

B2C

Putting your product in the hands of a consumer will always be your biggest payoff, despite the higher cost. The feedback you get interacting with customers trying your product for the first time… it’s gold!

Tie in a farmers’ market/small events program and boom, consistent volume.

Demos done well

We call successful demos the ten step sale: when people turn around and grab a sample in ten steps or less.  There is no better way to connect with consumers than having you or your team on the ground telling your story and answering questions.

Demos done right are critical to boosting velocity. Because the customer must first become aware of the product.  I feel as a founder whenever we have hosted a demo, the store has sold out of the product… but doesn’t happen with demo agencies. You hit the nail on the head with the “right ambassadors” being the key here. The ROI is hard of an agency doesn’t have the ambassadors that are a fit to your product line… but demos definitely are best way to put product directly in the hand of customers.

Your first steps are probably in-store demos, and the critical part is to deliver on both a first purchase and pave the way for future repurchases. This is why it is imperative to do them well. Demos need to support proper storytelling. Shoppers will likely repeat the first purchase if the product experience meets expectations. Oversell, and shoppers will buy and not come back. Under-deliver, and your brand is at risk of not building velocity on its own.

The main issue is usually that no shoppers know the product and must be introduced to it. This is probably an unpopular opinion but when it comes to food and beverages. I have found demos, done properly by trained brand ambassadors, to be highly effective at generating early trial and shoppers placing the product in their carts. There’s a reason Costco demands them. There are no categories where initial price promotion alone can drive the trial of an item to 200+ potential shoppers in a single afternoon. Sampling and demo are THE best way to alert shoppers to something new. They are also very expensive to do, but they work really well when done properly.

Digital rebates

Combine digital rebates with demos. Have a printed flyer at the table that says “Save $XX on Today’s Purchase, Scan Here” with the QR code listed. Then the demo person explains how it works. This enables you to capture customer information and build a relationship with them.

Social media

Partnering with local influencers for in-store events can create buzz and drive foot traffic. Also, consider leveraging social media for targeted promotions.

Ads

Smaller brands usually find it hard to get into ads and displays but you could negotiate that as part of your entry deal with a retailer and ask that you get an ad and display (if you are being carried nationally it’s much easier) within the first 60 days. Also means you may have to go deep on that promo.

Paired promotions or demos with a more popular brand may also work in some categories.

Essentially, you need an approach to build awareness and incentivize trial.

Discounts and promotions

The off-price channel could help from the distribution AND marketing aspect. At the end of the day, you give them the best dead-net price and ship.

Discounts for an initial trial work.

The oversimplification of trade promotion is a major issue across smaller brands. You spend significant amounts on slotting (can be > 10% of gross revenue) getting into a retailer, then another 20% on trade promotion.  The first area should be determining your plan’s objectives and measurements. Trial? Building ongoing velocity? Increasing base volume? Lowest rate per case over a quarter? Total incremental cases? Cost per incremental case?  Then you need to recognize each retailer partner has a different format – and you need a plan to achieve their objectives within their format as well and match it to your objectives. Successful brands / companies dedicate key resources (f/t & fractional) to analyze these areas – it’s not a simple process and should get the importance it deserves based on the dollars involved.

Markdowns without ad/display may only drive trial with shoppers that walk down that aisle. That is, it may work well for higher trafficking aisles but not as ideal for lower trafficking aisles/sets. The goal is brand awareness and driving trial. Always shoot for markdowns with an ad and display – will get the eyes of more people and optimize opportunities for new users.

I believe that markdowns are still the backbone of any plan. Hitting a sweet retail price, any ad or display that can come (if free or reasonable) will enhance more. I think everything else helps drive first trial and awareness, but markdowns win when it’s a choice between you and something else.

In-store displays

Any sort of endcap or feature/display works. At Whole Foods we were featured for a while in their “local brands” endcap, and they also had some shelf tags for local brands featuring photos of founders, and it drove a lot of velocity. Trade and discounts can devalue premium brands so that wasn’t a good option for my product.

Develop a long-term strategy

It is far harder staying on the shelf in later years than getting on the shelf initially. Expect to be  told no hundreds of times in the beginning–when you get those wins and the yes it feels like you’ve won the Lotto!

In the last two years I have completely changed my strategy. When I first started it was all about how many doors I could get in which almost bankrupted me. Then it was getting in the right stores. Now it’s selling more into my existing stores. For instance, we have some stores where we turn $1,100 a week in product. Then we have some that only turn $80 a week. We found that at the stores where we did consistent demos, and quarterly promotions plus live events, we grew like gangbusters. Not only that, but doing community-based things like farmers’ markets. So, we have focused on growing same-store sales and plan for no outward growth for 2025., instead we are trying to create 30 stores generating $1,100 a week.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *