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As your suppliers, customers and consumers have adjusted to this new way of the world, so too has your business. With signs that the worst may be behind us, and countries beginning to open up, we wanted to share 6 examples of steps, you, as a supplier can take right now to get prepared, and stand you in the best position for what lies ahead…
1. Rethink your promotion strategy
Promotions serve to temporarily increase demand for your product through a lower value proposition. Increasing demand at this stage, when volumes are declining, seems like a rational decision, but the upstream impact on already-stressed supply chains could pose a risk. Further, the wider impact of Covid-19 on the global economy is going to be felt for a prolonged period. Your consumers are going to have lower disposable income, and that makes your value proposition so much more vital in the months following. A targeted strategy on value packs could offer the consumer an attractive option, particularly with the re-invigoration of the ‘weekly big-shop’.
2. Focus on shelf-ready packaging
The pressure to maintain stock levels on shelves is at an all-time high, and in times like this, adherence to agreed planograms is going to be a lower priority. It’s a challenging environment for those responsible for stacking shelves and continuing to put themselves at risk with daily exposure to the wider population. Making their lives as easy as possible is a sure-fire way to give your products the best visibility and availability. This will also serve you well when it comes future conversations with your customers.
3. Range rationalisation
The proliferation of different pack sizes has been a trend in the industry over the last 10-15 years. It’s a strong method of managing mix and growing revenue per gram/litre. In this time however, rationalising your offering to your core SKUs will bring efficiency benefits to both your business and the retailers, as well as clarifying your proposition to the consumers who may be purchasing your products for the first time.
4. Maximise the opportunities presented by the expansion of online
By many estimates, eCommerce has tripled since the start of the year, fuelled by consumers shopping from their homes. While we can expect these levels to tail off in the coming months, online shopping has been introduced to a new wave of consumers and this has subsequently triggered additional investment from retailers. The impact of this is that a channel which may have accounted for under 10% of your sales in years previous, can now be expected to account for significantly more. Consider the strategies you’d like to put in place to maximise this opportunity, and whether you can pull forward any online-specific initiatives planned for the long-term to realise the value sooner.
5. Plan for retailer negotiations – now
As the full impact of the virus becomes apparent, retailers and suppliers will need to collaborate on recovery plans. One of the best things your business can do right now is to start planning the win-win activities you want to propose to make your recovery a swift one. These could be in the form of any number of things such as promotions, pricing changes, NPD, in-store activations, marketing campaigns etc – but preparing now while other initiatives are on hold is a great way to set yourself up for success. Furthermore, there is a strong likelihood that conversations continue to be facilitated remotely – consider what this might mean for your approach and whether seeking external advice on negotiating remotely would be beneficial.
6. Take this opportunity to make a step-change for your business
We do not know what the world of retail will look like in 6/12/18 months, but you do know the areas of your business which can be improved – and now is actually a great time to press ahead.
In some cases, teams have more time on their hands to work on value-adding projects away from their day-to-day which could help to put the business in a position to come back to the market with more knowledge, or something new and exciting.
Implementing a new pricing structure across your customer and product portfolio might be one idea or doing a full evaluation of your promotions, so that when they are back on, you know you are only running the good ones!
While there may be resource or budget constraints - remain optimistic and try to find a way - spending the time today will help you win when you meet back up with the retailers. Who do you think they will prefer to partner with - the brands offering some exciting, novel ideas to get back on track or the ones who go back with the same old plan as 2019?
It’s a challenging time, however its also a time to get creative, and potentially try new things – what’s the worst that can happen?!
If you would like to know more about how Acumen can help in this area, get in touch at info@acumenci.com and we'll be happy to discuss how we can enhance your revenue management capability.