2021 Retail Strategy

2 0 2 1 R E TA I L

S T R AT E GY

T A B L E O F C O N T E N T S

Overview3

Retail Authority 2.05

The Rise of In-Store Search9

Master Buyer Intent13

Grab a Shoppers Attention15

Optimize for The Shelf20

Turn Is Still Key30

Negotiating Terms & Fees33

2020 Retail Strategy https://MrCheckout.net Page of 2 39

https://MrCheckout.net

OV E R V I E W Developing A Path To Market For A Retail Product In 2021 Relies Heavily

On Creativity When It Comes To Branding And Merchandising.

Physical retail is no longer simply about moving product: Today, evolved brands view the store as a marketing channel for brand building, and services are one part of that brand building.

The boundary between retailers and service providers will become even more blurred in 2021. This is about more than legacy retailers adding in-store experiences and leisure services to regain relevance and tap shopper demand for “experiential retail.” The change is about strong brands and monobrand retailers in categories such as apparel, sportswear and beauty cementing their resonance with consumers by moving into adjacent markets.

We have seen a lot of sportswear brands broaden their offerings such as: TorySport offering fitness classes, Lululemon moving into the restaurant business, SweatyBetty hosting wellness discussions and NIKE organizing fitness events. We see opportunities for this trend to trickle down to less elevated brands and to transfer across to brands in other sectors from beauty to food to home goods.

Building a retail strategy in 2021 is going to heavily rely on standing out from the crowd not only by your pricing strategy or on-shelf presence but the experience that the store can provide to their customer by having you on their shelf and what that means to the culture. As shoppers become more and more aware of the ingredients, sustainability and morality of a brand it becomes important to provide that education on an in-store level.

The lines between online and in-store are becoming more blurred each day. Begin your strategy by building your retail authority and back into pricing through negotiation.



The Trends And Forces In The Future Of Retail

In 2021, evolving consumer preferences, shifting retail models and improved technical capabilities will drive change in global retailing. Above are five forces and 10 trends that will help reshape the future of retail.

We have been watching some of these forces—such as sustainability and alternative retail models—for some time. While they are not new, what is new is that they have reached new stages of maturity: We see a potential inflection point for some of these medium-term or slow-burning forces in retail.



R E TA I L AU T H O R I T Y 2 . 0

Nielson Survey59% Of Consumers Prefer To Buy Products From Brands That They Know.

Make no mistake about it: a recognizable and loved brand is one of the most valuable assets a company owns.

You may be competing against big brands with devoted customers and unlimited marketing budgets. That’s why you have to find ways to differentiate—with a solid brand building process of your own. Make no mistake… This is war.


C O M M U N I C A T I N G U S P

C E R T I F I C A T I O N S & A S S O C I A T I O N S

Q U A L I T Y

V A L U E


Advice From A Military Strategist

Carl von Clausewitz (1780 –1833), a Prussian general, was one of the most famous military strategists of his era. He wrote a brilliant book called “On War,” which is still studied today. One of his most famous quotes is, “War is the continuation of politics by other means.”

Here are five of Clausewitz’s “principles of battle.” They are highly applicable to the challenge of breaking into a new retailer where there is a strong existing product line.

Focus: “We must select for an attack one point of the enemy’s position and attack it with great superiority.” To win a new store or chain who already works with your competitor, focus on an area where you are clearly differentiated or have tangible strengths vis-à-vis your competitor. I’ve seen firms make inroads because they had a strong presence in a particular market or country, or had done some unique research around an issue of importance to the retail buyer. Ask yourself, Where do we have a particular strength we can leverage? Also, remember: if your buyer has to give up their relationship with another provider in order to have a relationship with you, that’s a high hurdle for them to get over. It’s much easier if they can keep their existing friends while adding another friend (you!) in a very focused area.

Surprise: “One of the strongest weapons of offensive warfare is the surprise attack…it is the most important element of victory.” If possible, try to come in under the radar. If a competing product line finds out their retailer is having very preliminary talks with you, they may be able to put the kibosh on your efforts and convince the buyer to cut you off. If they only become aware of your presence when you are about to sign a deal, however, they may be unable to stop you. You might even consider coaching your contact about this, reminding them that it would be human nature to try and block you, which would not be in his or her interests.

Audacity: “…never forget that no military leader has ever become great without audacity.” If you want to penetrate an already well-served account, you have to be bold. You have to walk in with great confidence. You must project strength and deep



experience. Successful rainmakers aren’t intimidated because there’s already a strong competitor in place. They know that things can change overnight, and sometimes they do.

Shelter: “…obstacles in the terrain enable us to place our troops under cover …to support our flank, it must be absolutely impassible, such as a large river or lake.” Clausewitz writes extensively about terrain and how to use it to your advantage in a battle. In our language, the obstacle for the competing product line would be the shelter of a trusted relationship that you develop with a key executive. If someone likes and trusts you, it represents a strong barrier to being pushed away by other executives who are loyal to an competitor. This means you must cultivate a relationship—even more than in other cases—to underpin the ultimate sale. If no-one feels a personal connection to you and your solution, you’ll be easily dislodged.

Energetic Follow Up: “(We must) follow up our successes with the utmost energy.” On the first project or engagement, you have to do a great job and even exceed expectations. Your buyer has to receive validation of their decision to hire you, especially since they may have been under pressure not to.

In today’s market, a successful brand has to be consistent in communication and experience, across many applications:

• Environment (storefront or office)

• Print collateral, signage, packaging

• Website & online advertising

• Content publishing

• Sales & customer service

Now, brand building being simple? The truth is: branding doesn’t happen overnight…or even in a few months.

Building a brand is definitely a process. However, the ongoing effort will result in establishing relationships with your customers and developing retail authority.



Having a stellar reputation that proceeds you can lead to a steady increase in sales, more collaborations, word-of-mouth referrals, and advocacy for your products or services or product evangelists.

The definition of brand building is to generate awareness about your business using marketing strategies and campaigns with the goal of creating a unique and lasting image in the marketplace.

Positive Impression + Standing Out = Brand Success.

In 2021, the amplification of your brand image can be done effectively through various digital marketing activities:

• User Experience (i.e. your website)

• SEO & Content Marketing

• Social Media Marketing

• Email Marketing

• Paid Advertising (PPC)

Together, these channels are fundamental to gaining brand awareness and growth.



T H E R I S E O F I N -STO R E S E A R C H Foot Traffic In Retail Stores Has Declined By 57% In The Past Five Years,

But The Value Of Every Visit Has Nearly Tripled.

People use their smartphones before heading in-store—to gather ideas, research products, and then search for local information. It's no wonder that searches for "near me" have doubled in the past year.

But research isn't the only way mobile is changing the shopping experience. Shoppers buy on mobile, too. A person today might make a buying decision about a $15 tube of sunscreen, a $300 camera, or a $3,000 handbag on a smartphone while on her commute to work, as she walks the dog, or waits to pick up her son in the carpool line. Time on site for mobile users in the U.S. is down 5% year over year, however retail's share of online purchases is still growing. Thirty-four percent of online retail purchases now happen on mobile devices.



The bottom line: In this mobile-fueled shopping landscape, the retailers that thrive see the opportunity to be there and be useful for shoppers in what we call micro-moments—those intent-rich moments when people turn to their smartphones or other devices to know, go, do, or buy something.

According to a RetailMeNot Study: Internet users looking for more information in-store often skip approaching retail associates and go directly to their smartphones.

69% percent of respondents said they would look for reviews on their phone first.

53% would search for deals before speaking with an employee.

The Retail Moments That Matter

Shopping micro-moments often start when people have a need or desire to purchase a product and they begin thinking of ideas. This leads to research and eventually purchase. These moments tend to fall into one of three categories:

I-need-some-ideas moments happen when people have general awareness of the product category they're interested in, such as living room furniture, but they haven't yet narrowed down their choices to an exact product.

Which-one's-best moments—a.k.a. consideration moments—happen when people turn to their phones in short bursts of activity to compare prices, brands and specs, and read product reviews from trusted sources.

I-want-to-buy-it moments happen when the research is done and it's decision time. People make a choice about which brand or retailer to buy from, and whether to buy online or in-store.

With these moments in mind, how can you ensure that you're there for shoppers?



The First Steps To Being There And Being Useful

What micro-moments mean for retailers is this: It's less important for a shopper to be present in-store than for the store to be present wherever and whenever a shopper needs them. You've got to figure out new ways to show up with helpful information when those moments occur, whether it's 2 p.m. or 2 a.m. There are two ways to do this:

Be there: Identify the most important micro-moments and commit to being there, whenever and wherever a shopper is searching, especially on mobile.

Be useful. In a consumer's moment of need, meet them by providing valuable information—whether it's product reviews, video tutorials, or the ability to purchase right away.

The first step in being there and being useful is understanding and acting on shoppers' intent and their context. Intent is what the shopper wants in any given moment (Is she looking to browse or to buy?), while context includes her location and the device she's using.

If you marry intent and context with what you already know about your shopper (Has she visited your site in the past? Is she a loyal customer?), you can start being there and being useful in the right moments.

By targeting on demographics alone, you may miss out on valuable consumers who may be in market at that moment. Consider this example: If you sell car seats and you target moms alone, you'd be missing out on relatives or friends who might be in the market to buy a car seat as a baby shower gift. You may also be wasting marketing dollars by targeting moms who already own a car seat or women without children.



IT'S LESS IMPORTANT FOR A SHOPPER TO BE PRESENT IN-STORE THAN FOR THE STORE TO BE PRESENT WHEREVER

AND WHENEVER A SHOPPER NEEDS IT.

Let's look at one retailer that has put intent and context at the center of its shopper experience. Target saw that 98% of its guests were shopping digitally and that 75% were starting on mobile. But in categories like patio furniture, its in-store and online teams were still operating and marketing separately, even as more than 50% of their sales in the patio category were coming through Target.com.

The company looked at it from its customers' point of view. Guests might search on smartphones for patio furniture, then see completely different merchandise when they came into their local store. So Target merged its online and offline marketing and merchandising teams into a single unified patio team that was mobile-first. It decided what products and signage to feature in-store based on digital demand.

Target also ran Google local inventory ads to show customers on mobile the exact patio furniture that was available in the store nearest them. As a result, patio revenues in the stores in which Target made this change have been dramatically outpacing the stores in which the change has yet to be made.



M A ST E R B U Y E R I N T E N T We’ve Learned Some Key Strategic Principles From Von Clausewitz. Now Let’s Briefly Review Some Tactics That Will Help You Break Into A Retailer.

Look for trigger events. There are a number of circumstances that will make it easier to break in. These could include things such as:

• A conflict of interest with an existing provider

• Executive changes

• Reorganizations

• Economic events or shocks

• Turnover or retirements at the competition

• A service or quality failure on the part of your competition

If you are making a cold call, develop a tailored approach that aligns with one of the buyer’s key goals. To quote a senior buyer I recently spoke with: “People who are trying to get an appointment with me leave voice messages and send emails all the time—but I ignore most of them. They leave general messages like, “We have an interesting solution that we’d like to show you,” but that doesn’t get my attention. But something like this does: “We have a product line that recently went viral on instagram with over 20k orders in the first three days. I’d love to talk with you about doing a small in-store test on consignment.”

Try to identify something small or non-threatening (to the buyer) that you can work on. As I mentioned, if in order to onboard you a supplier they have to dump an existing supplier with whom they have a good relationship, your chances of success are slim.

Invest to earn the client’s trust and respect. The existing supplier has the advantage and you’re probably going to have to go above and beyond in terms of making an up-front investment in understanding the buyer’s issues and organization, and building



their trust. If something goes wrong with their relationship with your competitor, they will reach towards someone else they already trust—and that should be you.

Identify executives in the client organization who are not as loyal to the other provider. You’ll certainly be able to capture the attention and interest of these executives more easily, potentially dividing and conquering.

Earn share of mind, emphasize innovation and new ideas. Buyers and their assistants are always looking for fresh perspectives, and they will usually not let an existing relationship get in the way of at least listening to someone else’s good ideas. Develop a contrarian position about one of their important issues, and you’ll most likely get a hearing. And remember, to get a purchase order you need to first win some share of mind!

Be patient and persistent. It may take many visits and many conversations over a long period of time—months or even a year or two—to find the right opening. Most buyers are looking at a minimum of 6 months out when planning the next re-stocking.

Stay in touch so you are there when your opportunity comes up. This applies to any new business development situation, but even more so when there is a major, established competitor. You have to be there when “the dam breaks” so to speak.

Pick your shots. It takes investment, so be selective about investing your time, and focus on opportunities where the potential payoff is highest.

Look on the bright side. When a buyer has an established relationship with your competition, it means that: the retailers has a need for your product line; they are used to using external providers in your market; and, they value a long-term relationship.

These are all strong positives. In other words, there’s plenty of honey in the beehive—you just have to romance the bees and get by the bear who is guarding it!



G R A B A S H O P P E R S AT T E N T I O N Retail Brands Have One Second To Grab Consumers Attention

The Four C's are the critical factors in selling more merchandise at a retail supermarket or specialty store. The Four C's are:

• Command Attention

• Connect with the shopper

• Convey information

• Close the Sale

Individually, each of the 4C's represents a cognitive step the shopper experiences when engaged with the point of sales materials. It starts with becoming aware of a product or offer and ends with choosing to buy. You can think of it as a mental path-to-purchase that occurs at the point of sale.



Command Attention

A product that is not noticed will never be effective! The first step in the 4C process is to ensure your point of sale is noticeable in the retail or online environment.

Connect With The Shopper

Once your materials command the shopper's attention, you must ensure the shopper recognizes what it stands for, but you don't have much time - usually 1 second or less. If your point of sale doesn't register as recognizable and relevant, the shopper moves on without a second thought.

Convey Information

Now that the customer has stopped at the shelf and is evaluating your product, how effectively can you convey a clear, compelling message to the shopper that gets them from considering to closer to buying your product!

Close The Sale

You've commanded the shopper's attention, connected with them, and conveyed initial information. Now, what does the piece have to do to close the sale and get the product into the basket? Shoppers deselect before they select, cues tell us how to convey a message and how to close. They also offer ways on how to optimize point of sale design.



Getting Your Products To Move Off The Shelf

Retail merchandising is the organization of merchandise in an appealing way to get shoppers who come to a brick and mortar retail store to be engaged and inspired to purchase more product than they initially thought they would.

Retail displays and visual merchandising are — and will always be — essential in driving attention and conversions in brick-and-mortar retail. Studies have shown that much of the information that human beings process come through the sense of sight.

According to researchers Dr. L.D. Rosenblum, Dr. Harold Stolovitch and Dr. Erica Keeps, here is the breakdown of how our five sense processes information:

• 83.0% – Sight

• 11.0% – Hearing

• 03.5% – Smell

• 01.5% – Touch

• 01.0% – Taste

Clearly, human beings are highly visual in nature, and this is a fact that is particularly important when you’re running a physical store. One of the main reasons why people decide to shop offline is to see merchandise in person, and this is all the more reason to design winning retail displays.

1. Create Immersive Retail Displays

The best way to make a lasting impression is to immerse your customers in a particular environment or setting. Check out the example below. The displays themselves are simple, and the retailer only makes use of a few simple racks and fixtures.



But because all the other elements of the store (i.e., the color of the walls, the cold-weather items, and the text “it’s cold outside”) follow a unifying theme, the overall effect is quite powerful. It engulfs customers into the “cool” theme of the store, creating an immersive experience.

Keep this example in mind for your next display. Recognize that you don’t necessarily have to build something fancy. If you have a strong theme and ensure that all the components of your shop are in line with the story you want to tell, you can create a compelling and immersive experience using just a few simple products and fixtures.

Use Displays To Educate People About Your Products

If your products need a bit of explaining, then it could be a good idea to use your displays to educate shoppers about your items.



The following cookware display at Crate & Barrel does exactly that. The top part of the display has images of the items for sale along with a quick description of what each product is and what it does.

GoPro spearheaded using digital screens to show the capability of what their cameras could do creating a captivating display that people will stop and watch during their errands.



O PT I M I Z E F O R T H E S H E L F The Right Packaging Can Help Make A Good Product Great.

When it comes to choosing the right packaging material for your product, you can’t go wrong by paying close attention to the details. After all, packaging may just be one of the biggest factors in making your product a success.

The right packaging not only attracts consumers, it will keep your product safe in transportation and keep it fresh. This reinforces the quality of the brand and item when customers know they can count on a fresh item from when it hits the shelf to when it’s in their hand.

A sleek design and top notch branding are key elements for any piece of product packaging. Functionality is just as important. In this post, we will help you to choose the right package to set your product apart on the shelf, and to meet with success after it leaves your facility.

Here is a list of important considerations we will discuss for successfully planning your packaging:

• Packaging Budget

• Packaging Transportation

• Packaging Materials And Sustainability

• Packaging Size

• Packaging Design And Branding



SELECTING THE RIGHT PACKAGING

1. Packaging Budget

Before you begin any packaging endeavor, you must determine the scope of your budget. This will determine what kinds of materials you can use, and what you can spend making your design as enticing as possible.

Materials like glass and natural fibers look terrific and are visually appealing to consumers, but are not cheap, either to manufacture or to ship. Glass is heavy and breakable, leading to shipping and storage concerns, and may lead to increased consumer prices. Sometimes a consumer is willing to pay more for greater perceived value, but sometimes that increase in price is not worth the cost of additional packaging.

There are many budget-friendly packaging options, too. Food-grade cardboard is a relatively inexpensive material that offers reasonable crush protection and interesting design opportunities.

Plastic is not the most environmentally-friendly option, though is often recyclable, can be made from recycled materials, or both. Talking that up on the packaging itself can be an incentive to the consumer to feel good about buying your product.

Finding the right balance of what you want to spend on creative and in production versus what you’ll need to spend on materials will largely affect your project.

2. Packaging Transportation

Once you have decided on the package design, it’s time to consider function. No matter how amazing the design, if the package doesn’t function properly, it will do you no favors.



An amazing design that tells consumers it was made for them but can’t travel from your facility to the shelves without being damaged is a package that is worthless.

If your product is bulky, delicate, or any kind of unusual shape, it’s important to consider materials that are designed for strength.

Products with a long shelf life that need to stand out even after a long time on the shelf need special considerations, too. A superior print finish, such as with a UV treated high-gloss, liquid-based coating could do just the trick.

It’s always more cost-effective in the long run to pay for adequate protective package design in the first place than to replace damaged goods later on. Shoot for the middle ground sweet spot between when the cost of product damage equals the cost of protective packaging and you will be in good shape to satisfy your production budget as well as your customers.

3. Packaging Materials And Sustainability

When it comes to packaging materials, it’s a good rule of thumb to treat your products like you would treat yourself. Just as you would not want to live in a home that is too big or too small, the right space for the right packaging has great effect on the end result.

Shrink Films and many other flexible packaging materials are lightweight and most yield excellent printing results. The cost from a freight and shipping standpoint is also ultra-favorable for businesses when compared to heavier, bulkier packaging. Additionally, there are film options available to help your brand promote sustainability with recyclable packaging and less packaging waste.



Flexible films are best used for food, dairy, cosmetics, pharmaceuticals, hardware items and retail products to protect, extend shelf life and provide an attractive package on and off the shelf.

Carded packaging options are flexible and ideal for produce, fragile or items that need to be seen to assist in a sale. They are also an excellent option for hang-tab displays in the retail environment. They included the following types;

Blister Packs: Blister Pack is the name associated with several types of pre-formed plastic packaging which are commonly used in the packaging process of products such as consumer goods, perishables, and pharmaceuticals.

Clamshells: Of all the carded packaging supplies, clamshell packaging is perhaps the easiest to use. Clamshells look a bit like their namesake as they are made from two identical "shells" that are connected on one side with the other having small hinges that allow it to lock shut.

Skin Packs: Skin packaging (also known as skin packs), is a carded packaging supply that places the product contained within on a piece of corrugated cardboard. A slim sheet of see-through plastic which covers the product and cardboard backer is then applied.



You will not regret taking the time to get a feel for the different materials available to you. Find out works best and make it one of the foundations of your packaging decisions.

4. Packaging Size

If you have a product that comes in four different sizes, you may well be able to reduce costs by designing two different sized packages instead of four individual sizes by being economical with the dimensions and design.

Being creative in this way and incorporating cost saving measures such as this can ensure the integrity of the product you ship. As an added bonus, you will save both time and money, and will also ensure consistency throughout your products.

You will want to take into account the pallet and work backwards to find the best way to package your line. Maximize your stacking and be consistent in case you need to provide a mixed pallet.

Size is also very important when it comes to in-store placement as a large point of sale display could be very educational, however it may not fit in half of the stores. If you want to be on the checkout counter, make sure that your product is slim and easily movable. You may also want to consider providing a display if you want to take it vertical and stack products on top of each other saving countertop space.

5. Packaging Design And Branding

While it’s important to consider budget, transportation, materials, and package design and to incorporate each of these elements into your overall package design, it’s key to keep your audience at the forefront of each of these decisions.

Keeping your target audience at the forefront of your design along the way will help you meet overall success with package design.



The type of material you choose to use in your packaging design is a part of your brand, so any disconnect between your materials or design and your brand’s message will confuse consumers and make them lose trust.

To appeal to your customers, you have to research and understand them enough before you make these key marketing and branding decisions.

Market research is a great way to learn what your target audience values and decide how to pair those details with your budget, transportation, and sustainably needs and goals. Always listen to your key demographic and cater to their needs specifically.

Packaging Possibilities

There are endless options for packaging material available. The only limitations are those of budget, sustainability, and perhaps your imagination. Be sure to review all aspects of packaging material options and come up with a workable plan that keeps your key demographic as its center.

Most importantly, make sure your brand’s message is conveyed to your audience with any package you put on the shelf.

By taking all of the dynamics above into consideration, you will be well prepared to create beautiful, sustainable, eye-catching and quality packaging. This will ensure that the entire process of choosing the right packaging for your company is a seamless and productive process. In the end, you will be sending out only the best packaging for your companies high quality products.



DESIGNING YOUR PACKAGE

1. Consider Your Brand’s ‘Story’

Packaging is an integral part of telling your story. You want something that tells your customers who you are in a visual format which is easy to absorb. Especially for small businesses, success often comes from offering something different from the faceless e-commerce giants. Something unique and personable.

Before you even sit down with a designer, or to design your packaging yourself, you need to have a good think about what makes your brand unique. What are your core values? What is the ethos that drives your company? What value is it that your product/service creates for your customers? These answers will help you to zone in on the key ideas that you want your packaging to communicate.

Choosing a generic design which looks great but has little relevance to your company won’t allow you to leverage the full branding benefits of packaging.

2. Be Consistent

In any form of marketing, the consistency of your narrative is the key to success. Choosing a design which doesn’t resonate with the rest of your branding is going to look confused and disjointed. More than anything, brand consistency breeds trust. You want your customers to see your packaging and feel that they know what you stand for.

This is obviously a lot easier for companies who are just starting out. By launching all elements of their marketing at once, they can ensure that it’s totally cohesive from the outset.

For existing companies, upping your packaging game can be a great time to review the rest of your branding strategy. Has the ethos of your brand or customer base



changed over time? If so, your packaging design could be a jumping off point for a wider branding refresh!

3. Choose The Right Color Palette

There are more considerations here than how your packaging looks. Color has a lot of symbolism behind it which is critical to be aware of in your branding. When between 60 to 90 percent of consumers make decisions based on color, it’s important to understand what different shades represent. Of course, color psychology is not an exact science. Our personal experiences are far more likely to influence us than what branding experts tell us. However, here are some broad guidelines to help with your decision-making:

Red: It’s a great color if you want to stand out, which is why sale signs in stores are almost always red. It also makes a bold statement in standing for passion, energy and excitement. However, this strength means it should be used selectively; too much red can be overwhelming and aggressive, which may not be in the interests of your brand image.

Green: As a very relaxing color, green is great for injecting a dose of freshness into your branding. Its broad themes of life, health and growth is positive symbolism to pretty much any business. For brands that have sustainability as a core value, green is very symbolic of these efforts, especially if used for motifs and logos.

White: Great for a clean, minimalistic look. However, this only works if carefully executed. The plainness of white can come across as lacking imagination and creativity, especially since it runs the risk of looking a bit Apple-esque and unoriginal. To avoid looking too sterile, try combining it with an accent color or bright pattern that shows a bit of character.

Black: Black is a barrier color because it’s heavy and absorbs light, which makes a powerful statement. It’s sophisticated and timeless, which is why it’s commonly favored by brands aimed at the premium end of the market (think Nespresso and Nike). Black



can also come across as oppressive and serious in some settings, so it’s worth considering breaking up with the addition of a lighter tone.

Blue: As one of the most soothing colors, blue gets used very widely in branding because it indicates reliability and steadiness. Naturally, this is something every brand wants to communicate with its customers. However, it can come across as generic and boring because it is so unobjectionable. If you really want to stand out from the crowd, it’s not your best bet. Instead, try using it as an accent color rather than the base of your design.

Yellow: As such a bright and cheerful color, yellow can help to give your brand warmth and character. Because it’s very in-your-face, it can be quite overwhelming when used in a solid block in packaging. Paired with something darker and used as a motif or text, however, is a great way to grab attention. The shade of yellow you choose is also very important; darker shades of yellow can often look dirty or faded, which is not a good look for product packaging.

It’s important to remember that context has a strong role in color psychology, such as cultural variations. Red, for example, is considered a lucky color in many Asian countries, rather than symbolizing passion. Depending on where your customer base is located, this could be something important to consider. You can also send a strong message by intentionally bucking traditional ideas in your branding, such as how blue and pink are considered heavily gendered colors in the West.

4. Use The Right Materials

The materials you select for your packaging generally boil down to a combination of these considerations:

Functionality: Does your packaging simply need to be attractive and well-branded, or does it also need to accomplish another goal? For a lot of companies, packaging has a functional purpose as well as an aesthetic one. For the former, the material you choose needs to reflect this as well as your brand identity.



For example, packaging fragile products in paper or tissue looks attractive, but will do your brand no favors if the customer receives damaged products! If this is a risk, you’ll need to choose something which is durable and protective, or else package your aesthetic wrapping within something stronger.

Cost And Time Effectiveness: These are definitely the least exciting considerations, but also some of the most important. Practicality needs to be central to whichever material you choose, or you can have serious issues further down the track.

If you’re an e-commerce company that has to ship products, choosing a heavy material is going to add a lot of cost to this process, especially if your customers are based around the world. This can mean passing on that cost to your customers, which could harm your ‘valued-added’ efforts.

Your timeline is equally important; how long will it take you to source your materials, and how reliable is that service? How long will it take to put together? This is really the make or break for your design.

Sustainability: Consumers care more than ever about the impact of packaging, and they will make decisions accordingly. A survey by consumer giant Unilever found that over one third of consumers chose products whose brands they saw as being environmentally friendly.

Here, your packaging has the ability to be a key selling point for your product and part of your branding narrative. It shows customers, rather than just telling them, that you take social and environmental responsibility seriously and want to set a good example.



T U R N I S ST I L L K E Y Best Practices For Designing A Winning CPG Pricing Strategy

20 million price points per year complicate the matter of pricing consumer packaged goods (CPG); with each price point exposed to the further influence of discount, rebate, and trade allowance categories, combined with customer-specific trade terms negotiated by powerful retailers. With so many variables it is extremely complex and time-consuming to determine competitive prices that add to the bottom line and also benefit the final consumer.

With low-profit margins per unit, assigning the optimal price to a CPG is a matter of competitive advantage. With CPG pricing every percentage point matters. A combined research by Nielsen, McKinsey, and GBA has revealed that pricing winners who adopted best practices in devising a pricing strategy were able to increase unit prices by 1.2% more than the category average. At the same time, they gained share by growing sales by almost a full percentage point ahead of their peers.’

While some best practices are technology interventions, others are about partnerships. However, the success of any of them is tied back to access to timely and competitive, data-driven insights. Some of the practices that have led to a winning CPG pricing strategy are:

Transparency: The consumer wants to know how the product is made and how the price is determined. While CPG manufacturers are reasonably dependent on input costs to determine the price, they also need to include other costs pertaining to the trade. If the retailer and manufacturer find a way to convey the story behind a product’s price, the consumer is more inclined to build trust into that product.

It is not easy to share the accurate price with the consumer, round the clock across multiple product categories. With data analytics and harnessing the digital experience using handheld devices, retailers can pass this challenge. To achieve transparency,



external environment factors need to be included in the strategy. 56% of retail consumers said they would be very likely to stay loyal to a completely transparent brand for life.

Pricing Elasticity In Co-Relation To The Competitive Edge: Standard pricing and MRSPs don’t provide positive returns or increase profitability while dealing with CPGs. To achieve dynamic pricing, manufacturers and retailers need to adopt ‘predictive econometric modeling.’ This further relies on Price analytics.

Models like own-price elasticity which signifies that changes in prices affect sales volumes; cross-price elasticity, where changes in prices affect competitive edge and the popular price corridor model which defines a price range to maintain a share in respect with the competition.

Data analytics helps marketers in creating multiple promotional prices in real-time response to market changes, using a plug and play simulation. Apart from promotion optimization which is most demanding output in real-time, marketers can also create the optimal standard prices and proactively determine future prices for available inventory.

Data analytics helps in avoiding situations where more than two-thirds of trade promotions that happen in the US each year don’t break even, as Nielsen has identified.

Retailer Engagement: Retailers are an influential part of the pricing power play. Regular and frequent pricing discussions with retailers is a great practice to establish profitable prices. However, this practice will fall apart without the support of insights generated by analytics.

Nielsen has identified in a survey that “winning pricing strategists continue to engage retailers in pricing discussions at regular intervals (at least once a year), framing these discussions in ways that are relevant to retailers and taking into consideration the market environment and pace of inflation.



Winners are also more likely to take a multidimensional approach in pricing discussions, emphasizing retailer profits and product or category investment—not just commodity costs.”

Pricing Analytics: With CPGs, price decisions are not solely in the hands of the brands’ owners and manufacturers. Retailers who also take ownership of the brand’s price image have the ability to apply steep discounts or hitting the manufacturer’s suggested retail price (MSRP) quite often. Typically retailers avoid presenting the latter option to their customers and that plays on the brand image of a premium pricing product.

Retailers involved in dynamic pricing convince their customers that the best price for a CPG is the price that is established for the day through a promotion. They enjoy this advantage of revising the price to their benefit, by employing data analytics. Lack of pricing analytics will not just create a competitive disadvantage, but also create price wars between the manufacturer and their own set of distribution channels

Unlike traditional analytics, advanced analytics like predictive and prescriptive analytics which are powered by AI have the ability to harness both unstructured and structured data and transform them into meaningful insights. In a fast-moving industry like CPG, advanced analytics is a must for decision-makers to develop fact-based recommendations and increase accuracy in decision-making.

Pricing analytics provides deep insights to decision makers about consumers and their response to a price point at different times of the year. However, when CPG manufacturers start using pricing analytics, they draw an advantage of establishing an optimal price point for products hitting the market, batch after batch.



N E G OT I AT I N G T E R M S & F E E S "The most dangerous negotiation is the one you don't know you’re in"

~ Chris Voss

Shelf space is a hot commodity, and CPG companies often incur substantial costs to get their products in-store, secure premium placement, and run promotions. It’s critical that CPGs get the standard of execution they pay for. More importantly, they must be able to accurately evaluate if the rewards, in terms of incremental sales, outweigh these costs.

The ever-growing portfolio of brands and high competition for shelf space allows retailers to command considerable shelf space fees. There have been numerous arguments about whether the fees charged actually enhance space allocation efficiency or encourage backroom deals between stores and manufacturers that promote monopoly. But as it stands today, these are the broad types of costs incurred by manufacturers:

Slotting / Listing Fees: Slotting fees (or listing fee) is the amount of money a manufacturer pays a retailer to appear on the shelves. This transaction typically takes place after a range review process once the retailer is convinced about a product’s potential to generates sales and profit. Slotting fees average $1500 per store per SKU. If you consider that a range review may introduce 7-12 new SKUs, listing these products in a 1000-store retail chain nationwide has a huge impact on a CPG’s bottom line. Note that simply paying slotting fees won’t drive sales if you don’t ensure shelf availability at all times.

Pay-To-Stay Fees: These fees are paid by CPGs during category reviews in the form of discounts or free cases of products to the retailer. Typically, it is offered to ensure that SKUs that have been flagged for removal from shelf, stay. This may mean that the manufacturer needs to reactivate their shopper marketing activities to spur purchase decisions at shelf.



Display Placement: Stores also charge significant fees for seasonal features and the promotional displays that appear at the end of aisles. A manufacturer may pay $350 – 500 per display per store. The fee varies depending on the product, e.g. higher for specialty, or choice of secondary placement, e.g. placing crackers far away from the snacks category (perhaps closer to beverages). The main aim of this is to introduce the brand to new shoppers. So, the ROI of this fee is diluted if regular shoppers purchase the brand, or if the product was bought at the home shelf.



Measuring ROI To Justify Spend On Shelf Space Costs

In order to achieve the right return on investment (ROI) on these costs, CPGs must ensure that they get the space they paid for – and that this space is actually maximizing sales, and that shelving principles are property executed in store.

A short-to-midterm evaluation cycle analyzing various micro and macro drivers of sales performance is necessary for companies looking to measure return on shelf related costs:

• Short-term ROI evaluation (one to four weeks): This focuses on secondary placements and promotional sites, with CPGs tasked with carefully monitoring on-shelf availability of their products and promotion compliance.

• Medium-term ROI evaluation (six to 12-month window): The focus here shifts primarily to the regular stock location in store. The goal is to understand the cost of lost sales due to shelf gaps, how much incremental income the listing fee has generated, and if competitors have eaten into your brand sales.

TOP PRICING STRATEGIES

Before you can determine which retail pricing strategy to use in determining the right price for your products, you must consider the product's direct costs and other related expenses. These two key elements of overall product cost are termed cost of goods and operating expense.

Markup Pricing: The markup on cost can be calculated by adding a preset, often industry standard, profit margin percentage to the cost of the merchandise. The percentage markup on retail is determined by dividing the dollar markup by the retail price. For example, if your markup is $20 and your product retails for $40, your percentage markup is: $20 / $40 = .50 or 50 percent. Remember to keep your markup high enough to allow price reductions and discounts, cover shrinkage (theft,) and other



anticipated expenses, in order to achieve a satisfactory profit. If you retain a varied product selection, you can use different markups for each product line if needed.

Vendor Pricing: Manufacturer suggested retail price (MSRP) is a common strategy used by smaller retail shops to avoid price wars and still maintain a decent profit. For any products you resell, you'll find some suppliers have minimum advertised prices (MAP) and may not let you continue to sell their products if you try to price below their MAP.

Competitive Pricing: Consumers have many choices and are generally willing to shop around to get the best price. Retailers considering a competitive pricing strategy need to provide outstanding customer service to stand above the competition.

Pricing below competition simply means pricing products lower than the competitor's price. This strategy works well if you as a retailer can negotiate the lowest



buying prices from your suppliers, reduce other costs, and develop a marketing strategy to focus on price specials.

Prestige pricing, or pricing above the competition, may be considered when your location, exclusivity, or unique customer service can justify higher prices. Retailers that stock high-quality merchandise that isn't readily available at other locations may be quite successful in pricing products above their competitors.

Psychological Pricing: Psychological pricing is a technique of setting prices at a certain level where the consumer perceives the price to be fair, a bargain, or a sale price. The most common method is odd-pricing, which uses figures that end in 5, 7 or 9, such as $15.97. It is believed that consumers tend to round down a price of $9.95 to $9, rather than $10.

Keystone Pricing: Keystone pricing involves doubling the cost paid for merchandise to set the retail price. Although this was once the rule of pricing products, more intense competition and the continually changing retail landscape have driven some retailers to use methods other than Keystone. However, stores selling higher-end goods with less sensitivity to price may still use keystone.

Multiple Pricing: This method involves selling more than one product for one price, such as three items for $1. Not only is this strategy great for markdowns or sales events, but retailers have noticed consumers tend to purchase in larger amounts when they use multiple pricing strategies.

Pricing Strategies Based On Discounts

Discount pricing and price reductions are a natural part of retailing. Discounting can include coupons, rebates, seasonal prices, and other promotional markdowns. Typically, price strategies based on discounts are designed to bring in more traffic that might offer the potential of purchasing higher-priced items.



Discount Pricing: This one is self-explanatory. Merchandise priced below cost is referred to as a loss leader. Although retailers make no profit on these discounted items, they hope the loss leader brings more consumers into the store who will purchase other products at higher margins.

Economy Pricing: Used by a wide range of businesses including generic food suppliers and discount retailers, economy pricing aims to attract the most price-conscious of consumers. With this strategy, businesses minimize the costs associated with marketing and production in order to keep product prices down.

Price Skimming: Designed to help businesses maximize sales on new products and services, price skimming involves setting rates high during the introductory phase. One of the benefits of price skimming is that it allows businesses to maximize profits on early adopters before dropping prices to attract more price-sensitive consumers.

Bundle Pricing: With bundle pricing, small businesses sell multiple products for a lower rate than consumers would face if they purchased each item individually. Not only is bundling goods an effective way of moving unsold items that are taking up space in your facility, but it can also increase the value perception in the eyes of your customers.

When paying a slotting fee to a retailer, there are ways that you can increase your chances of being successful. It starts by knowing how much you’re willing to spend and not going over that amount. Don’t pay an amount that will hurt your company just because they’ll offer you a slot in their store. Once you’ve paid your fee and have a good location on a shelf, you need to work to create sales.

Use marketing tactics, such as in-store promotions, to influence people to purchase your product. Paying a slotting fee will get you on the shelf, but it’s up to you to stay on the shelf. If you provide quality products and market them well, you’ll likely sell more product.

This will convince the retailer to keep you on the shelf without a slotting fee because you’ll be moving product and both making money.




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2021 Retail Strategy

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