A lot of time and energy is typically devoted to “promoted” sales since no matter where you find yourself, there is strong inflationary pressure and our retail and wholesale customers are under pressure to reduce retail selling prices. We all focus on short term tactics to chase monthly, quarterly or year end annual volume targets. It becomes a vicious repetitive cycle
Making sure we don’t lose focus on non-promoted sales means we spend time on insight driven category growth drivers and therefore select the right tactics to grow the category and our brands, without the need for constant promotions. It also makes sure that every single non promoted product sold achieves a higher return on investment for us, because the category tactics we select are effective for our customer’s shoppers.
In many cases our customer price sheet and annual plan is driven by an endless succession of “deals” to land the volume orders. These often merge one into another so that promoted sales outweigh non-promoted sales and the net price the customer pays us as a supplier as well as what shoppers pay on shelf, becomes the new ‘norm’.
That leaves non promoted sales largely ignored and many opportunities to tap into our category growth insights will be missed.
We can reduce and optimise our trade spend by focusing on the right tactics and commensurate level of investment for all non promoted sales – so that every single unit we sell is done so with a profitable return on our trade spend investment.
This includes developing effective and efficient the strategy and execution for non-promoted sales in strategic category focus areas such as distribution, location in store, assortment, price points, location on shelf or on a website, and display share.
A clear plan for non promoted sales which focuses on the right category strategy and tactics (which we communicate effectively to our own sales teams; distributor partners and our customer merchandisers) means that our overall trade spend delivers a stronger return on investment and helps us both meet the needs of our customer’s shoppers – but also our own objectives with the customer.
Have you sense checked that the tactics you select for non promoted sales are efficient and effective? Are you clear about what good looks like in the category and what the growth drivers for our customer’s shoppers are?
Next in our ‘Top 10 Tips to Reduce Trade Spend’ series we consider reducing and optimising trade spend by limiting the amount of forward buying we allow with our customer. If you have any questions or comments please get in touch.