Are You Ready For Your Product Line Review?

Are you ready for your product line review?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.

You are the expert in your product categories, not the retailerA meeting with the retailer should include the following in a Product Line Review:

  • Company history
  • Financials
  • 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

Here’s what retailers are looking for in a line review presentationSuppliers 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?

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.

Good Selling!

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5 Tips to Succeed with Big Boxes

5-Tips to Succeed with Big Box HomecentersMaybe you already sell either Lowe’s or The Home Depot or both. Maybe you eat channel conflict for breakfast. But it’s been my experience that the continuous competitive clash between orange and blue is something that is tough for many manufacturers’ to figure out.

Selling one or both of the home center big boxes is a great way to drive volume.  Each, however, works hard to differentiate themselves from one another.  That makes it had to sell both of them when you have a commodity category.  But it’s still possible to do this without being a major consumer brand.

To sell a big box chain, you need to think and act like a big consumer brand – not spend like one

You do have to think and act like one of the big brands. That means not being a product expert alone, but a marketer who’s expert at driving the business (see the Channel Instincts post Are You a Marketer or Just a Product Expert?).

5 tips to help you win in a big box product buyer presentation5-tips to sell both Lowe's and Home Depot

  1. Do your homework. Visit the stores in both chains. Know what the competitive products are and how they’re merchandised and priced. Talk to the associates and department manager of your category.  Find out what’s working and why. And ask about what kinds of issues they are seeing. You may be able to uncover a pain point that will resonate with a buyer.
  2. Be the expert in your category. Pitching your product is almost the least important part of your discussions with buyers. Instead, you need to be clear that you know what’s going on in your category and have unique insights that will help the big boxes driver sales. Don’t walk in with secondary research and expect to get taken seriously. You’ll need primary research to really get attention.
  3. Have a marketing plan, not a sales pitch. Be a partner for growth. Share how you are going to create excitement for your category with your product and brand plan. Be able to clearly differentiate your product from everyone else. In other words, answer the question of “why should I switch?” If you can, show how you will bring them innovation or exclusivity (maybe in the form of a head start). By the way, exclusivity always comes with reciprocation.
  4. What’s Wrong with Lowe’s and Home DepotUnderstand the needs of their shopper. Lowe’s and Home Depot are not alike! You must dial in on how you are going to meet the shopper’s needs. For example, the pro makes up around 40% of big box home center sales – how are you reaching the pro? What about the DIY-er and DIFM groups? If you don’t know what these terms mean (“do it yourself” and “do it for me”), you’re not ready for your meeting yet.
  5. Getting on the shelf is only a first step. Now you have to show you can drive sales off the shelf. You need to have more than a lower price. You need a promotion plan that will get you featured in a tab with secondary placement. You also will need a powerful package design that is compelling as a silent salesman. Because finding an associate isn’t easy and they know even less about new brands and products.

Sell Lowe's and Home Depot SuccessfullyRight product + right price + right sales team = Success

I don’t want to oversimplify the competitive nature of selling into a big box account successfully. It takes a unique combination of the right product at the right price. Having the right sales team is critical as well.

But it will all fall apart if you do all those things right and don’t have a strong plan for driving the buyer’s metrics for growing the category.

Good Selling!

“Congratulations! We Are Putting Your Category Up For A Product Line Review.”

4016829091_9228f9fc51The news came by email at 6 pm…our biggest account was putting our category into an unscheduled line review.

Now everything was uncertain…our forecasts, our budgets, our plans.

Suddenly, without warning, we were faced with fighting for our space on the shelf.

Was it really unexpected?

frustrated-with-salesNothing sends a bigger shock wave through an organization than the unexpected line review.

Rumors fly and productivity decreases. Suddenly everyone is focused on “how could we not see this coming.”

Start off by asking yourself what really prompted this line review:

  • Did the retailer’s goals change? Is profit now more important than sales or the opposite? Is the merchant merely driving the corporate message down to you?
  • Was it “time” for a review? Had years past since the last time a formal review was conducted?
  • Is the category drifting or POS comping negative? Does the merchant need to show there’s a plan to upper management?
  • Did the competition heat up? Is there a new player or compelling new product in the category?

Regardless of if the answer is the category is tanking and the competition is sensing blood or the merchant just needs to have a clear plan to take to management, the focus you apply to the line review should be the same.

Put yourself in the merchant’s shoes

brent_729-620x349The merchant has no loyalty to you. That said, if you have performed well as a vendor, there’s not a lot of reason to create confusion at the shelf. Strong partners support one another.

You bring focus and insight to the category (for both the retailer and your product line) through:

  • Market trends
  • New products
  • Assortment planning
  • Competitive insights
  • Promotional plans
  • Packaging and merchandising
  • Service and support performance

Done well, you will only reinforce your value to the merchant. They, in turn, can confidently support you to their management as the vendor of choice.  It’s truly a win-win.

Build a plan that solves a problem

be seen as the category expert and offering a logical and compelling case about why you should be on their shelfYour moment of truth is your pitch to the retailer.

Chances are, the team will include the merchant, their assistant, their boss, possibly a planner and many times an unrelated category’s merchant. That last one is where all the tough questions will come from.

Their job is to be the spoiler – without having to have your merchant be the “bad guy.”

Your job is to build a story that is compelling from start to finish.

Focus on answering questions that your customer is trying to solve:

  • What are the shopper insights?
  • What are the category insights?
  • What does the financial analysis suggest?
  • How can the assortment be optimized?
  • How can we drive conversion through merchandising and promotion?

Regardless of the reason for the line review in the first place if you answer these questions well, you’ll be seen as the category expert and offering a logical and compelling case about why you should be on their shelf.

The retailer is not the expert in your category – you are

If the retailer wins, you winBelieve it or not, the retailer is not the expert in your category – you are. But they do have perspective. Perspective from other categories they manage and from hearing what your competitors are saying.

But what they need to know is how they are going to improve sales and profitability. Maybe not overnight, but definitely within their fiscal year. It’s how they will earn promotions and make their bonus. Consequently, any recommendations you make should help them win. Because if they win, you win.

So pitch your presentation in a way that shows:

  • Clarity of the alignment between the retailer’s shopper and who buys your brand.
  • Insights on what’s happening in the category, why it’s happening, what it’s impacting and what – together – you’re going to do about it.
  • How your recommendation brings differentiation, innovation and excitement to the category and directly addresses market and shopper trends.
  • A clear picture of how you are bringing the best financial program, the best products and the marketing plan that delivers the most value to both the retailer and their shopper.

The merchant is evaluating your credibility as well as your recommendation

Think of it this way, the merchant is evaluating your credibility as well as your recommendation.

If you come in with clear plan – one that’s supported every step of the way with facts – you’ll be in a better shape because the merchant will be able to use your recommendation and data in supporting the decision to go with you and deliver the goals the merchant’s management team has for the category and department.

Good Selling!

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