What Retailers Want from SMBs with Brittany Crosby
Brittany Crosby is Director of Seasonal and General Merchandise for Walgreens. Over the past decade, she’s served in multiple category managerial positions, managing $1B+ businesses. She has managed everything from wine & spirits to cough, cold & allergy, and previously held similar positions at other major retailers. She has helped grow brands from the ground up, working with SMBs and major CPG organizations during her tenure.
This post features a written interview with Brittany, who provided her answers in response to questions from Emily Holdman.
Let’s start with the basics. How does product buying work at a retailer? How does it differ from retailer to retailer? What are a buyer’s priorities? In an ecosystem where e-commerce and D2C receive most of the hype, what role does retail distribution play in the market?
Great question! The simplest way to put it is, you most often have a team that manages a specific segment of the business, and they are responsible for the strategic vision, relationships with suppliers, negotiating, and getting the right products in store. There are a number of cross-functional teams that are involved, and the buyers are typically the center hub that the spokes go in and out of. The basics of how products get in the set are fairly comparable retailer to retailer, however pricing structures, profit, investments, and differentiating strategies could vary greatly by retailer.
The buyers’ priorities are greatly dependent on the priorities of the organization. It’s important for suppliers to understand the strategy of the retailer they are working with and the strategy of the division or category they are in. Additionally, it’s important to know the consumer trends and how their product can influence that within the retail space. This is very true as you mention the omnichannel experience many consumers are participating in. While being online is incredibly important, there are still large numbers of customers who go to stores, pick up the product, and browse. It’s still important to have multiple channels for consumers to find products.
A consistent frustration we hear from SMBs is that it can be hard to maintain good relationships with retailers because buyers so frequently change. Why are buyer changes so common/frequent? How should SMBs think about navigating such changes?
Having moved around my organization many times, I understand and hear this feedback from our SMBs as well. Most of the time buyers are moving around to gain new skills and knowledge working on other categories, getting promoted or, in some cases, moving on to a new organization. While it may seem frequent that an individual changes over, the buying team usually consists of a few individuals; it’s much less often that the entire team transitions over. I would encourage the SMBs to not only build a relationship with the buyer, but also the assistant buyers, the planners, supply chain, etc. Having those other touchpoints will help maintain consistency and provide new buyers with history of the ongoing relationship.
A substantial amount of products on the shelves at any major retailer are from big corporations. How have you seen small businesses successfully end up with shelf space (e.g., price point, packaging, product differentiation, pitch approach)? Feel free to specify a priority order on features.
I’ve worked with a number of large and small brands over the years and what is always most important is how the product is different from what is currently out there. What problem are you solving and does the consumer know they need that solution? If you feel like your product needs to be at a premium price, why? Be able to clearly articulate what makes your product better and how the consumer is going to know this. You don’t need flashing lights and gimmicks to have a great product pitch. You need to be able to tell someone about the consumer insight you have found and how your product will solve it. Once you have that, the price point, packaging, and placement will come into conversation to ensure it all matches what you are pitching. Buyers see hundreds of products a year, and what we most often want to understand is how this is solving a problem we don’t already have a solution for.
How does a brand get a buyer’s attention? Do buyers entertain cold outreach? How important are trade shows? What are the most productive methodologies for making a connection?
This question brought back many memories of being in the buyer chair and some of the approaches suppliers took to get ahold of my team. Trade shows are definitely important, and I do encourage them. Whether it’s a show like ECRM, NACDS, NACS, or Expo West, most retailers are attending and walking the floor. Not to say there aren’t meetings planned, but we always blocked time to walk around and look at new products. I’ve found some great brand partners walking a show floor, and we collectively built success from the ground up. Shows like ECRM are great as you are scheduled with the buyers and are able to see a number of retailers together and utilize systems like RangeMe.
If an SMB is not attending a show, email, LinkedIn, and using your network or broker can be just as powerful. There are many broker firms out there that work with retailers and have great partnerships; for some brands it’s a great resource to get a foot in the door. They often know the buyers, the company strategy, how to work the systems, and what will be important in those early pitches and negotiations. Again, it’s not for everyone and not a must-have by any means.
When a small business pitches a retail buyer, what are the most common missteps or mistakes? What are the most important considerations in prepping?
Over the last many years, I would say some of the bigger missteps are as follows:
The brand doesn’t know their strategy or aren’t able to articulate why a retailer needs them
A brand will list all of reasons they are a “me too” to something that is on shelf, which will remove them from the consideration set
Their packaging doesn’t help the customer understand what the product is or the key benefits of why they need it
A product is premium priced, but the brand is unable to articulate why
A brand isn’t using consumer insights in their research or pitch
When you are prepping, put yourself in the buyer's shoes. If you can say to yourself, “I am able to clearly articulate the strategy of our company, what my product is, and why it’s needed or different, the pricing and promotional strategy aligns with the retailer’s, and I’m using a consumer insight to solve a problem,” you’re in a good spot. Do your homework on the retailer you are meeting with. A mass retailer, grocery store and drugstore should not all have the same pitch as they function differently and have very different consumer facing strategies. For example, a mass shopper may be there for multiple needs such as grocery, technology, or general needs. Their focus is a more curated assortment at the best retail. A more specific channel of retail like food or drug may lean on a broader assortment at a different pricing index as they factor in convenience, promotions, and fill-in trips. A mass retailer could be more of a destination for your product, whereas at a retailer like a grocery store, your product could be part of a basket builder, a fill-in need, or a last minute gift. The product may work in every retailer’s door, but you need to approach each conversation uniquely.
What makes a pitched product an obvious “YES” for a buyer?
This is actually a tough one. Sometimes the art and science of being a buyer align during a pitch or meeting and you know you’ve found something. When something is truly innovative or completely aligns with a strategy, that could be an obvious yes. I have not had a ton of those – not because they don’t exist, but because there are 75 other pieces that I’m putting together in my head of how this product can succeed and what we need to do next.
How are new products most commonly tested (e.g., regional test)? What do the most successful tests prove out? How long is an average test period?
Transparently, this one will definitely vary most by retailer, both by how they test and how long they test for. Some retailers have test doors where they get to try new products and take risks and others will execute regional tests or pick a number of doors they want to test something in. Successful tests will be measured against a control group, and what we look for is frequency of purchases, how the sales would extrapolate to the chain, how any marketing or promotional efforts worked, and other key value items (KVIs) that were determined going in. If you are testing a product with a retailer, make sure to have the discussions of timing and metrics to be measured. If there are seasonal or other factors that need to be reviewed that could impact item performance, etc., those should be laid out upfront.
What could cause a product to be cut? Roughly speaking, how many products are cut and/or replaced in an average year?
When a product is cut, it’s typically because the performance is not meeting the forecast and the customer is not getting it. Most buyers will try differentiated promotions, placement changes, and retail changes to see if results improve, but if those don’t work it is very hard to keep in the set. With new items, it definitely takes a year to get traction and measurements, and those are important conversations to have with retailers if you want to stay in the set after year 1. Unfortunately, the size of the footprint and department can greatly impact the amount of items cut, as well as new innovation or pressures from the organization. In large sets, it’s not uncommon to see double digit removals with double digit adds. If you’re looking at a 30 ft run, it’s not uncommon to have over 70 items coming out.
How important is product evolution, variation (e.g., new colors), and advancement in maintaining shelf space? What pace of change (e.g., annual) does a buyer expect?
What I tell brands is that evolution for evolution’s sake won’t make sense from a cost and customer perspective. If you are elevating the product or working to align with trends, that is important. Most buyers don’t expect some type of evolution every year unless you’re in a product space where it’s needed (i.e. beauty trends or clothing). Too many product changes for everyday products (cleaning, OTC, gen merch) can confuse the customer and actually lower performance if they don’t realize it’s the same product. We have had lessons in packaging changes and the big marketing needed to let customers know it’s the same product as what they are used to with new packaging. If you make a change, do it because it’s necessary and align with your buyer. Buyers have great insight on what has worked and what hasn’t and are a great resource to bounce ideas on.
What are the traits of the most successful SMB-retailer relationships you’ve seen?
The best traits of any relationship, whether SMB or large company, are collaboration and communication. You are there to work on ideas, measure customer behavior and performance, and drive the business together. Listen to what the buyer is telling you and really understand their strategies. Also, listen to what the customer is telling you with their actions (e.g., purchasing behavior). What they say they will do and what they actually do may be very different.
Don’t create work for the buying team – I know this sounds intuitive, but some of the best relationships are where SMBs bring a problem with solutions. The buyer and brand may do something completely different, but the fact that there were ideas brought to the table makes a world of a difference.
What are examples of things SMBs do that can sour a retailer relationship?
This will be true for any size company, but anyone can sour a relationship by creating work, complaining/making excuses, and not communicating. If your product isn’t doing well, don’t make an excuse. Come with actions to test/execute. If you can’t get ahold of a buyer, don’t go above them to complain to their manager. It’s important to figure out what might be going on and how to best communicate together. Think about how you want to be treated in the relationship and let that guide your partnership. The buyer/supplier relationship may not always seem fair, but it’s usually not personal.
For a relationship to succeed, everyone needs to be able to make money. What should SMBs keep in mind when it comes to price mapping products for retail distribution?
Money is definitely a big piece of what we do! The biggest thing to consider is knowing what you can do from a risk standpoint and asking about margin requirements. Don’t over-commit if it could put you in financial turmoil. If an SMB cannot support pushing product to thousands of doors and bear the risk of not succeeding, suggest a walk-jog-run approach. The worst thing an SMB can do is commit to a door count that you can’t ramp up product to, maintain ongoing in-stocks, or bear the risk of markdowns and returns. Those are critical conversations to be had, especially when many retailers also have investments and product placement negotiations to also consider. As an SMB, you should know what your financial roadmap looks like.
What retail trends should SMBs be paying attention to for 2023 and beyond?
I love this question because retail is in such an interesting place right now. The pandemic changed consumer behavior so much that retailers are still redefining strategies and understanding what new behaviors will stick and which will likely revert. Additionally, consumers are seeking greater value with economic pressures and pricing transparency they have access to on digital.
Retail is also building strategies due to the continued rise of social influencers and TikTok, which can bring a product to fame literally overnight. This doesn’t work with all categories, but in spaces like beauty and personal care it’s been putting brands in the limelight like never before.