The line review process is a validation step for the retailer. Remember they are ultimately confirming that they are offering “the right product, sold for the right price, at the right place and time.”
The goal of the Product Line Review process is to ensure that your customers have the most competitive and compelling assortments available at retail.
To properly evaluate this, retailers routinely ask the primary manufacturers in each product category to educate them on the market opportunity, their company, products and go-to-market distribution strategies.
You are the expert in your product categories, not the retailer
As a supplier selected to attend the review, you are being asked to give open and honest feedback on the retailer’s current retail assortment. This feedback should include product, pricing, promotions, packaging, merchandising, logistics, services, and any other attribute that will assist them in growing their sales, profit and market share while minimizing space and inventory investment.
A meeting with the retailer should include the following in a Product Line Review:
- Company history
- Capabilities and capacities
- US total category size
- Company market share within US market
- Category market share by channel of trade
- Suggested product assortment mix and pricing
- Plan-o-gram (POG) set, point-of-purchase (POP) material and merchandising ideas
Once you and your competitors have had the opportunity to present their proposed go-forward business improvement strategy, the retailer’s merchandising team will make the decision as to which supplier(s) will be awarded the business based upon predetermined criteria which often includes components like these:
- Management attitude and commitment to build a strong long-term relationship
- Supplier’s ability to service, support and grow the business*
- Product quality, innovation, design and exclusivity opportunities
- Supplier market share and their ability and passion to help grow with the retailer
- Current performance indicators, if applicable
- Absolute best cost/value relationship
The typical Product Line Review is conducted in three steps
STEP ONE – Pre Line Review
All invited suppliers are sent an electronic file that often includes the following documents:
Confidentiality Agreement – Due to the sensitivity of the information being shared, suppliers are generally required to execute a Confidentiality Agreement. This ensures that your information will not be immediately placed in your competitors hands.
Product File – Before the actual PLR meeting, suppliers usually are asked to complete a standardized spreadsheet related to the existing assortment and add any new or non-comparable products deemed necessary to complete the new recommended assortment along with recommended invoice pricing. The file can also include:
- Vendor contact & ordering information
- Market share statistics
- Advertising programs
- Current item assortment and pricing (including any assortment adds or deletes)
Lately, retailers have wanted pricing to be quoted as Net/Net. This allows an apples-to-apples comparison between suppliers. Net/Net is defined as the retailer’s net cost, excluding all other added costs such as freight to their stores, distributions centers or cross dock facilities, payment terms, rebates or other back-end funds, marketing or co-op funds, over and above money, promotional funds, slotting fees, defective allowances, etc.
STEP TWO – Product Line Review
Suppliers that have successfully executed step 1 of the Product Line Review process are invited to the retail headquarters to meet with the merchandising team.
Power Point Presentation – Generally, you will have 60-90 minutes to present your recommendations. The retailer wants to be sure they are offering “the right product, sold for the right price, at the right place and time.”
Here’s what the retailers are looking for in a presentation:
- Company Profile – This should include all necessary information to get a complete understanding of who you are, what you do, where your products are manufactured, distribution centers, company financials and management team.
- US Market Share information – This should include any relevant information that would help us understand the total size of the category being reviewed (in US Dollars). Your company’s share, your competitors’ share, your retailer’s share and their competitors’ share of the retail, wholesale and direct markets and any other market share or industry information that may help them make a more informed decision.
- Product Information – Educate the retailer on your products and programs, new technologies and innovations, and why you believe they should be stocking your products versus those of your competitors. Explain how your company can help them differentiate their assortments from those of our competitors.
- Marketing and Promotional Plans – Show the retailer what we can do better and how you can help us drive more customers into their stores.
- Competition – Provide retail price shops from the retailers that sell the most products in the category under review (these retail competitors should be agreed upon by both the supplier and the merchant). Help them understand what they need to do to be competitive in today’s marketplace. Educate them on marketplace best practices, success stories and any pitfalls to be avoided.
Recommended Product Presentation – All suppliers attending the Product Line Review will also be required to set up a plan-o-gram (POG) of their recommended retail assortment. A POG is a visual representation of where and how to place products on your shelves in order to maximize sales.
This is a critical part of your Product Line Review story. A good POG is based on historical sales data which indicate which products are the best sellers and which products work well when placed together – for example in improving impulse sales.
Discussions should surround how the newly recommended assortment is merchandised to help customers make an easier, more informed buying decision. Explain how the good-better-best sell-up strategy works and how the packaging and point-of-purchase materials tie the program together.
Ultimately, you must demonstrate how the new POG will improve the sales and merchandising the category while still meeting all the shoppers’ expectations of selection and price.
Decision Process – After all supplier presentations are completed, the retailer merchandising team will select its go-forward supplier partner(s) for the product category being reviewed.
Once a supplier has won a category line review; they will remain our supplier partner of record for the foreseeable future provided they continue to perform.
STEP THREE – Post Line Review
Often line reviews are completed a full year ahead of when the store transitions will be made. However, you will begin working with the merchant team to review, design, develop and implement the following:
- Establish the final assortments
- Finalize all retail pricing
- Determine store counts
- Develop or update all needed signage and POP materials
- Finalize logistics
- Execute agreed upon discontinued inventory exit strategy
- Implement new plan-o-gram(s) into retail stores
- Train store associates to the benefits of the new program
Can you avoid the Line Review Process altogether?
The line review process is a validation step for the retailer. Remember they are answering to their management team that they are meeting the corporate goals, aware of the market dynamics and pricing and ultimately answering that they are offering “the right product, sold for the right price, at the right place and time.”
That said, the Product Line Review process can either intense or a “softer” business review. If you focus on be a top supplier, you may be able to avoid highly competitive line reviews. Being a top supplier means:
- Keeping the retail partner competitive by providing the best possible products at the best possible price
- Consistently shipping on-time and maintaining an above average unit fill-rate
- Establishing mutual annual business plans to effectively drive sales
- Introducing your retail partner to new products and programs before full market introduction
- Updating and maintaining plan-o-grams including packaging and POP materials
Bottom-line, by taking complete ownership for the success of your products, programs and overall business, you can win and maintain your business with the biggest and best of the retailers in the marketplace.
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You left out a big part of the presentation – the Product. Every line review involves presenting product… and usually the packaging. Product line reviews are not just about presenting the company financials – as so many CEO’s and EVP’s like to spend time on, but the key to a product review is having compelling product for the buyer to “buy” into. The buyer isn’t selling the company financials or the POS.. they are selling product.
So, in order to have a well rounded presentation be sure to put your best foot forward by presenting the most compelling and complete product you can. Buyers will often move product line reviews up closer than expected, which may not be in line with the product development, so be prepared!
I don’t disagree that product is central to the meeting but too often I have seen companies fail in a PLR because they are relying exclusively on their product pitch to carry the day. Demonstrating that you are an expert in the category and that you have a thoughtful plan to sell thru the product make a bigger difference.