If you want to understand how important sell-through is to the
success of your product, consider the case of Contech Electronics.
By
focusing on shelf space and sell-through at such big-box retailers as
Home Depot, the Victoria, British Columbia, startup is on pace to
produce $4 million in revenues this year, and more than $8 million in
’07, compared with six-figures a couple of years ago.
“It
takes more than a good product to sell well,” says CEO Mark Grambart,
whose company makes motion-activated sprinklers meant to chase wild
animals from lawns and gardens. “You need to spend as much creativity
and innovation to sell your product once it’s on the shelf as you did
in creating the product.”
Here are more tactics for putting your startup on the same path as Contech:
Get all exclusive with your major retailers
Shelf-space
is one thing, but it’s quite another to get a major retailer to give
your product a chance to prove itself. One way to do it is by promising
exclusivity. In an era of homogenous big-box retailing, this can be
very tempting to Wal-Mart, Target, Lowe’s or other major chains.
Robin
Gohsman believed Target would be the perfect retailer for Be Bars, a
line of nutrition snacks he was creating. He studied similar products
offered by the Minneapolis-based chain, and the gaps in its lineup.
After he impressed Target buyers, they agreed to significant test
marketing of Be Bars – if they could be the exclusive retailer.
“We
convinced them we had the potential to increase their business because
this was a line of products that was marketed and packaged differently
from everything else in the marketplace,” says Gohsman, founder of Be
Unlimited, in Milwaukee. “And we were willing to go it alone with
them.” After a 200-store test of Be Bars in 2004, Target rolled out the
line nationwide in early ’06.
Mix it up – extend your product line
With
new products constantly entering the market, retailers have to be
stingy with shelf space. Ironically, one way to carve out more for
yourself is by offering to fill more! Once it’s clear there’s consumer
interest in your product, introduce new versions and other products
that make sense for your brand for a more varied mix.
Tom
Szaky came up with an organic fertilizer made worm from droppings, then
quickly turned his attention from large commercial sales to consumer
uses. He packaged TerraCycle in eco-friendly used soda bottles, and got
it on the shelves of Home Depot and Wal-Mart. Then it was up to him to
keep it there.
The key was coming up with new sizes,
packaging and varieties. It assured his retail partners that
TerraCycle’s innovations and staying power would hold customer interest.
“We’re
going to be up to 12 or 13 total products by next year,” says Szaky,
co-founder and CEO of the Trenton, N.J.-based company. “And we’ll be
close to hitting $6 million in sales next year after just $70,000 in
2004.”
Spread your product’s back-story
Consumers
will be curious about your product once they see it on store shelves,
even if they don’t buy the first time. Be ready to tickle and feed
their interest – and encourage a sales by telling the story behind your
product.
Figure out what makes your product, your company
and even you interesting or unique. Put the facts together in a simple
description or narrative or get the help of a good writer. Then tell
that story in every space you can find: on the back of your package, on
your Web site, in a press release to local media.
Randy
Schneider and Allen Evans launched Generator Nation in Fort Lauderdale,
Fla., a couple of years ago after seeing the need for emergency power
sources during natural disasters. Part of every sale is donated to
hurricane-relief charities. They worked with a local PR firm to get
their timely story out to South Florida media, helping produce strong
demand at Sunbelt Rental, the retail chain that stocks Generator Nation
products.
No ad budget? Go to grassroots
Chances are you won’t be able to support your retail presence right away with a full-blown ad campaign. In that case, rely on grassroots marketing
tactics. Ask if your retailer will let you hand out product samples or
other freebies in the store. Start a blog that includes customer
testimonials about your product. Enlist friends and family as product
evangelists. Ride around your first metro markets in a panel van
painted with product images and info. The methods are limited only by
your imagination!
Our Bottom Line
Landing
those first retail deals is only the start. From then on, it takes
innovation, imagination and work to get the sell-through that keeps
your retail partners coming back for more – while you watch your
company grow.
