Never Believe These 3 Common Retail MisconceptionsSep 01, 2021
written by Josanta Gray Emegano
Often, many digital native, direct-to-consumer brands start online with no intention of having a physical presence in stores. However, some entrepreneurs dream of seeing their products on the shelves of big box retailers and will do anything to cut through the noise to make it happen. There is no exact recipe to create the perfect launch, but don’t let these common misconceptions be your kryptonite on the road to grabbing the shelf space that you deserve.
1. I’ll be RICH after launch!
We all can’t be Rihanna (even though we secretly wish we could be). When Fenty Beauty launched in 2017, the line was quickly viewed as an industry disruptor by coming to marketing with a diverse and massive foundation range that sold out within days. Four years later, the beauty mogul sells out of Fenty Eau de Parfum in just 24 hours. It’s okay to manifest this type of success for your brand but the reality is it won’t happen overnight.
According to I.R.I., more than 10,000 new products hit the shelves each year, but less than 1% capture more than $100 million in year one of sales showing that there is no guarantee that your product will gain traction with consumers. Additionally, most entrepreneurs who are new to retail do not account for the hidden costs that pop up before, during, and after your launch which quickly will eat into your profits. These costs can include (but are not limited to) in store fixtures, late shipment penalties, marketing promotions, and freight costs. In short, it takes money to make money.
2. My brand will be in all the retailer’s marketing materials.
This line of thinking is dripping with entitlement, nonetheless some entrepreneurs naively walk into their retail relationships thinking this is guaranteed when it’s not. In some cases, retailers charge their brands a fee to be featured on their social media pages, highlighted on the homepage of their sites, and included in influencer marketing initiatives. Therefore, the weight of leveraging marketing tactics to push and maintain sales momentum will mainly fall on your shoulders.
Think about this amazing MUSE campaign that Ulta launched in early 2021 or Target’s What We Value Most campaign. Do you see ALL of your favorite brands featured? Even though you’re launching a product offline, do not overlook the effort you should be putting into maintaining your digital presence since marketing with retailers is not guaranteed.
3. My products will be in every single store that the retailer has!
Eventually, but not today. Please do not be the founder who naively demands that their products be launched in all doors (not that the retailer would grant this). But, that’s a huge undertaking financially just to get the cost of goods squared away. On top of that, you probably aren’t accounting for hidden fees that I mentioned earlier like shipping, in store fixtures, and marketing promotions.
Please don’t view launching with a retailer as a moment where you can take your foot off the gas. Additionally, fulfilling your first purchase order is by no means the finish line. It’s just beginning! Brands get booted from shelves just as quickly as they arrive for low sales, lack of inventory, and decreasing customer awareness. Working with a retailer will require you to be prepared for the fact that this world is constantly changing, and you will ride the rollercoaster with it. It’s better to start with whatever door count the buyer recommends and grow from there for you to see if you can keep up with the demand!
Check out our How to Pitch a Retailer course to learn about more retail misconceptions.