Shoppers at grocery, drug and discount stores are noticing a new trend — fewer types of products on the shelves. And this trend is expected to continue. According to a Wall Street Journal report, the typical retailer will decrease the number of offerings by up to 15% this year. This change means manufacturers face a bigger challenge getting their products into the hands of consumers. And the shift could disproportionately affect smaller manufacturers who are always looking for ways to take market share from well established industry leaders.
Some manufacturers believe there's a new attitude about the retail environment — one that indicates consumers are confused and bewildered by the number of choices in stores — think toothpaste and shampoo. Others believe the cutback may be temporary because of the recession. To maintain their relationships with retailers who cannot sell at the same level as before, manufacturers are cutting back on the range of products they offer and believe they'll make up the difference in increased sales of fewer variations of similar products. But what if you're having trouble getting your product back on the shelves or onto retailer shelves in the first place? The article highlights how salespeople from Church & Dwight met with retailers and presented hard data about consumer preferences and sales trends in order to get their product back in the stores.
The takeaway lesson from this new trend may be the need to increase marketing promotions with your retailers, especially trade promotions, and to be prepared to stay in close touch with decision makers at retail locations.[Source: Brat, Ilan et al. Retailers Cut Back on Variety, Wall Street Journal, 6.26.09]