If you’ve been in CPG long enough, you’ve likely been challenged at one point or another when it comes to sales velocity. In CPG, sales velocity is the measure of how quickly a brand’s products sell off the shelf. In other words, it’s that moment when “the rubber meets the road” because it proves that shoppers really do (or don’t) love your products. So, suffice to say, sales velocity is one of the most important metrics that any brand should be tracking. If you want to dig deeper into what it is and the math behind it, our partner Crisp provides a very helpful detailed breakdown here.
What negatively affects sales velocity?
Assuming you have a great product, sometimes things still don’t click. The timing of your category reset, mistakes in placement in the set, or a multitude of other uncontrollable variables could be reasons why your product didn’t fly off the shelves as expected. While all of these are important topics that merit further discussion, we'll save them for a future post and instead focus on what you can do to steer things in the right direction.
How can I increase retail sales velocity quickly?
Ultimately, no matter where, when, or how the product gets placed, you must find a way to win NOW. For the sake of keeping our eye on the prize, we’ll focus on five controllable strategies you can affect immediately at the store level to increase sales velocities.
- Eye-Catching Packaging.: Have you walked a grocery store aisle lately? There are thousands of products all fighting for the same thing: the eye of the consumer. You need to design your packaging with that goal in mind. Visit the stores you plan to work with, take pictures, ask for consumer feedback, and have a crystal-clear idea of what your primary connection point with consumers will be. Then, make sure that connection point jumps out from the shelf.
As you continue to develop your packaging, one thing to note: in a world of AI-powered everything, there are tools that will help you analyze this information and provide ideas on where consumers’ eyes are going.
- In-Store Promotions. Do you have a promotional plan? Every retailer provides opportunities to promote using discounts, or a TPR (temporary price reduction). This can be effective in motivating consumers to try the product, repurchase a product, or stay loyal to your product in a category. It is extremely important to take advantage of these tactics available to you and put together a plan that you know will help drive trial and attention to your product. Remember, you get a shiny new tag every time your product is on sale, and that is valuable.
- Merchandising. A great place to make real changes for your brand is being physically present in the store. In a world of digital first connection, you can make some great strides by just walking in the door. A lot of the “little” things in CPG that make a big difference can be done in the stores themselves. Make sure your product is stocked and faced correctly. Have a conversation with the store manager about the secondary placements they might have available to you. This simple thing helps ensure your products are prominently displayed on shelves and in front of the eyes of your next customer.
- Merchandising 2.0 -– Product Placement in High-Traffic Areas. Once you’ve filled the shelves and made sure pricing, tags, and reorders are accurate and have been completed think about other ways you might be able to partner with that store. If you have a shelf stable product, you could look at purchasing some POP displays and work with the manager to place them during promo periods in different but relevant parts of the store. Make sure to track the sales lift during these events (more on that later) and make sure that there is an ROI on the displays you’ve purchased.
- In-Store Demos & Sampling Programs. Sampling has made a comeback after a long rebound from the pandemic. If the retailers you’re focused on supports them, demos are always a good idea. It’s a great touchpoint and opportunity to get feedback directly from shoppers – as well as create new loyal customers. Demos and sampling can become complex and expensive to execute, but comprehensive tools like DemoGenius by Promomash were designed to make them easy, less expensive, and profitable to manage.
Remember, it's important to continuously assess the effectiveness of your strategies and adapt them based on consumer trends, customer feedback, and real actionable data. Not only will these efforts make for a better 2024, but building strong relationships with retailers and consumers will contribute to the long-term success of your emerging CPG brand.
