Healthy products are the focus of every retailer. Natural/better-for-you products are driving sustainable sales at every retailer across all channels. Better-for-you product sales are dramatically outpacing their conventional/mainstream counterparts due primarily to an increased awareness and focus on health and nutrition. Consumers want healthier food solutions to improve their overall health. It is virtually impossible to listen to the radio, watch TV, or read an article that doesn’t contain health advice from celebrities and health icons. Consumers are demanding transparency in the food they eat and feed their families, as a result.
Natural organic brands are leading the conversation by providing the thought leadership that resonates with the majority of shoppers. They are more closely aligned with the core needs of consumers and are delivering solutions and innovative products that are fueling growth trends in every category and in every channel. Natural manufacturers and retailers need to work closely together in the hyper-competitive CPG (consumer packaged goods) industry to remain competitive and to protect against large companies that place profit ahead of consumers needs and wants.
Natural/better-for-you products are not a radically new recently invented concept. Our grandparents ate healthy foods long ago, well before childhood obesity became a national epidemic and there were so many food allergies. The resurgence in healthy, natural organic foods is imperative to correct this problem. Natural products are responsible for fueling most of the important food trends appearing on restaurant menus, retailer shelves, and family dinner tables.
Retail grocery is a huge business with conventional/mainstream retailers. There’s a lot of competition for the limited shelf space that brands continually fight over. Big brands pay a tremendous amount of money in the form of promotions to buy and maintain distribution for their brands. This makes it virtually impossible for small natural brands to compete effectively.
Natural retailers provide an ideal platform to introduce new products, product ideas, and product concepts to committed natural consumers. Natural brands help drive health-focused consumers to shop in natural retailers. This symbiotic relationship is the focus of this article.
The natural channel today is where conventional retail was about 25 years ago. Conventional retail changed dramatically due to streamlined distribution, intense competition, and the demand for better pricing. These changes required new and better strategies for retailers and brands. These strategies framed the backbone of category management. I prefer the term “true category management” to differentiate between the strategies used in mainstream and natural. Natural retailers and brands that want to compete effectively need to be more strategic and do a lot more than share a series of basic topline reports at category reviews. Retailers and brands who adopt these powerful sustainable strategies can compete effectively in any channel and in any economy – including against their most sophisticated counterparts. These strategies will also help natural retailers combat against mass-slippage – the migration of natural products into mainstream retail that dilutes the ability for natural retailers to compete effectively.
At the heart of these strategies is the loyal shopper. While most brands and retailers focus on profits and sales, it’s important to remember that nothing happens until somebody buys something. Retailers are responsible for managing the product assortment and sales of several thousand items – depending on the retailer. It is unreasonable to expect any retailer to be an expert in every category and on every item they sell. Savvy retailers appreciate and welcome brands who can help guide and support them with detailed insights into the category, shopper preferences, market trends, in competitive threats and opportunities. Mainstream retailers rely heavily on top brands for strategic advice and insights. Natural retailers must do the same.
There’s a huge difference between the available resources in conventional compared to natural. Strategic resources for conventional brands and retailers are more robust and more capable. Natural retailers and brands need to be more creative. They need to work more closely together to retain and grow their customer base – shopper foot traffic (the number of consumers who shop your store), more shoppers equal a greater number of selling opportunities.
Natural brands and retailers need to focus on these five important areas:
- Exceptional customer service: Natural retailers are known for providing phenomenal customer support. This is a huge competitive advantage. Maximize each and every selling opportunity. Incredible customer service will keep shoppers coming back and increase word-of-mouth referrals!
- Assortment(product selection)/Merchandising: Natural retailers sell the top-selling items in each category in addition to the unique items that differentiate their store from the competition. Consumers unable to find their favorite brands will shop elsewhere. Give consumers a compelling reason to shop your store often – and not the competition.
- Strong national brands: These brands drive shoppers to your store, create excitement in the categories, support your marketing programs, connect you with their loyal consumers, and help differentiate you from the competition. Work closely with these brands to grow shopper foot traffic.
- Pricing: Shoppers will gladly pay more for value. Competitively price top selling items in the market and make your margin on those unique specialty items that offer more value. Provide real value for the price differential.
- Promotions: Promotions must be carefully managed to maximize each and every selling opportunity, to create new loyal shoppers, and to eliminate out-of-stocks.
The key to sustainable success for natural organic brands and retailers is to remain laser-focused on the shopper.
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