“Traditionally, late December and early January was a time for brands to sort of catch their breath following the busy holiday season,” said Henry Ho, Field Agent’s co-founder/chief strategy officer and a 40-year veteran of the global CPG industry.
“That’s not the case this year. Brands will have to hit the ground running in 2022.”
But why? Why will it be especially important for brands to be strong off the starting block this year?
Call it diversification.
We all know the merits of diversification from a personal investing standpoint. You don’t want all your eggs in one basket because one tumble and, splat, no more Eggs Benedict for breakfast. Diversification, for the personal investor, is particularly important during volatile and uncertain times.
As in 2021, COVID, supply chain disruptions, labor shortages, inflation, and the like will continue to harass brands, retailers, and shoppers alike, contributing to an atmosphere of unusually high, you guessed it, retail volatility and uncertainty.
And just like with personal investing, it’ll be crucial for brands to meet the challenges ahead with a diversified strategy. Not, as in years past, relying on a strong Q4 to carry the year.
That’ll be too risky in 2022.
According to Henry Ho, early and small gains will count more this year, and CPG companies should bring their A-game (maybe call it, their Q4-game) to Q1.
No time for “catching breath.”
If a brand gets off to a slow start in Q1, it means they’ll be playing catch up all year long—and under very trying circumstances.
Not good.
But if a brand gets off to a strong start, it’ll give the company momentum as well as margin and flexibility to take a few hits later in the year.
And in the present retail environment, brands can expect to take some hits.
So how can CPG brands ensure a strong start this year and in years to come?
The answer, of course, will vary from one company and category to another. However, there are some general principles and practices that can help brands put their best foot forward in 2022.
Consider 22 tips for a strong start to the new retail calendar-year.
You’ve heard the saying, you don’t have to outrun the bear, just the guy next to you.
It’s true. Not only when hiking the Rockies but in retail, too.
Late Q4 and early Q1—we’re talking calendar, not fiscal, years here, folks—is a time when many of your competitors will slow down. And while it’s important to sharpen your saw (we all need time off), realize that slowdowns among your competitors create opportunities for your brand to put some distance between you, “the bear,” and your rivals.
In much the same way a 10-point cushion in basketball will benefit a team all the way to and through the 4th quarter, a strong start to a new retail year can pay dividends all year: momentum, margin, flexibility, scale, and the like.
Of course, for CPG brands, we know there are constraints to being aggressive early in the year:
But don’t twiddle your thumbs while waiting for shoppers, funds, resets, and supply chain-unclogging.
You’ll see several tips below that can help your brand to a strong start in 2022.
But, for now, just know the right mentality is…
Be aggressive. Be, be aggressive. (Couldn’t help myself.)
Holiday shoppers get all the attention from media, researchers, and, yes, brands.
But every action has an equal and opposite reaction, and you can’t make a holiday shopper without making a post-holiday shopper. Vicious circle.
Q4 and Q1 shoppers are two sides of the same coin, and, in the same way Q4 shoppers have idiosyncratic attitudes, behaviors, and intentions, Q1 shoppers do, too.
The holidays, after all, really put a tight squeeze on consumers’ wallets, especially in a year of unusually high inflation.
Looking for a way to get ahead in 2022?
Spend some time getting closely acquainted with the Q1 shopper, whether investing in your own studies and insights or taking advantage of secondary sources.
Supply chain disruptions and low stock were front and center in Q4 2021. How could the business media ignore a man-bites-dog headline like “Widespread out-of-stocks meet busiest shopping season of the year”?
But, alas, just because holiday shopping is done doesn’t mean the supply chain and replenishment delays are, too. Economists and retail experts expect the delays to continue into the new year.
That’s the bad news. The good news is: Disruptions and delays create opportunities.
Brands that anticipate and prepare for delays, taking charge of the situation, will be better positioned in Q1—and thus all year—than brands that take a business-as-usual approach into the new year.
Which leads to…
We quoted several veteran CPG professionals in our 2021 resource, The CPG Guidebook for Q4 Success. Maybe my favorite quote was:
“The global supply chain is so tangled and disrupted that those who are paying the closest attention and driving the highest urgency are the ones that will outperform. Hyper focus on your supply chain and micromanage inventory, orders, and forecasts at every step in the supply chain” (emphasis added).
Super advice. And it’s advice that applies to Q1 as well as Q4.
While your competitors are hung over from the holidays, what actions can you take now (think tactics and tools) to gain visibility into and control over your supply chain?
The holidays create a sort of vacuum in retail.
The spending frenzy is done, shelves and displays are bare, and it’s the ideal time for retailers to reset planograms (aka modulars) for the upcoming year.
Consequently, in Q1, there’s a whole lot of resetting going on. (I think I have the name of my new hit single. 🎵A whole lotta resettin’ goin’ on 🎵)
Hopefully your brand made a case over the past year—with sales and retailer relations—for even more space on shelves.
But what can you do while planograms are actually resetting? Just wait and see?
You should be more proactive.
When planograms reset, what emerges is essentially a new category-by-category retail environment. And brands that know their environment will be better situated to spot opportunities and threats in it.
Consequently, you should be quick—quicker than your competitors—to get your bearings when those planograms reset. In-store audits can give you a reliable before-and-after view of store shelves during the reset season.
At Field Agent, where retail nerds are plentiful, we frequently talk about the retail success formula, or…
(I)nventory + (S)pace + (E)xecution = Retail Success.
🎵 ISE, ISE, baby. Dun dun dun da da dun dum. 🎵
Let’s talk the “I,” inventory.
Environmental complexity and labor shortages will conspire to ensure retailers continue to be short-staffed in early 2022.
For brands, this means the "last 100 feet" will suffer; replenishment will suffer.
One way to get a strong start in 2022: Provide your own in-store labor. That is, merchandisers who can hunt down and eliminate replenishment issues—like stock being in-store but not on-shelf/display—before they hurt sales.
Merchandising solutions from Field Agent can help brands “replenish to the finish” in the new year, especially at a time when efficient replenishment is a true competitive advantage.
The new year, with resolutions and all, is about starting some things and stopping others.
Here's something you can stop this Q1: Stop sending merchandisers to stores that don't, well, need merchandising. This is especially true for smaller brands with a limited merchandising budget.
Third-party merchandisers can make a real difference for brands and their retail sales, but some problems encountered by merchandisers are simply unresolvable. Other times stores don't need an intervention from a merchandiser—which is a good state of affairs...
...unless you're paying merchandisers to go there.
In 2022, resolve to use analytics programs that will help you distribute your merchandising dollars more efficiently.
There’s a great deal of “seasonality” in Q1.
At the start, shoppers are bundled in thick winter coats. By its end, they’re getting their bare knees dirty as they plant pansies in their gardens.
Or are they?
Behavioral swings like this look very different, depending on where you are. The United States is both deep and wide, and while Floridians are buying waterproof sunscreen, Bostonians are buying one more pair of wool socks.
But geographical differences aren’t set-in-stone year to year. Weather patterns, for instance, keep retailers and brands on their toes as they try to predict consumer demand.
Consequently, the brands that are paying closest attention, that can most accurately predict and most flexibly respond to seasonal differences in buying behavior, will be stronger out of the gate in 2022.
This is especially true for categories with a lot of seasonality.
We’re looking at you, Allergy Medications. (Sniff, sniff. It's starting already.)
Don’t. Forget. The. Relational. Capital.
As discussed in The Buyer Meeting Success Kit, there are several steps CPG professionals can take to ensure successful buyer meetings as well as fruitful relationships with retail buyers.
Positive buyer relations early in the year can yield mutual benefits for brands the rest of the year. And while it’s neither permissible nor ethical to put your brand in good standing with retail buyers by giving them gifts, there are intangible (and more meaningful) “gifts” you can give them:
In Q1, when things are maybe a little calmer following the Q4 rush, find thoughtful, meaningful ways to build trust and empathy with your buyer.
Such investments in relational capital can last the whole year. And relational capital is relatively more important these days.
This, too, was some advice we shared in our Q4 guidebook earlier this year.
For all intents and purposes, a brand's year breaks down into two phases:
In the sales phase, suppliers negotiate a program with retail buyers. The sales phase for any given quarter is followed by the execution phase, when brands ensure proper compliance with the retail program. For Q4 2022, for instance, the sales phase will take place roughly between Q1-Q3 2022, while the execution phase will occur in Q4 2022.
In Q4, brands have precious little opportunity to sell more cases to retailers. That happened earlier in the year, during the sales phase.
In this sense, Q1 can actually make-or-break Q4 for many brands! Consequently, in Q1 2022, make every sales-driven effort you can to bolster your Q4 performance.
Might we make a suggestion? Adopt and maintain a “one more case” mentality.
In your sales negotiations with buyers, choose many incremental gains over one or two huge gains. Choose singles, in other words, over grand slams.
Imagine what it would mean to your brand if you could sell just one more case of eachSKU to each store at each retailer?
Talk about a game-changer!
And “one more case” is a practical goal to pursue. It's "doable," from both a brand and retailer perspective.
Syndicated reports and point-of-sale data certainly have their place. Numbers, however, can only go so far. There's nothing like seeing and experiencing the inside of stores as they're actually executed by retailers and as they're actually shopped by shoppers.
The "store walk"—where brand representatives descend on one or more stores to witness firsthand the execution of retail programs—is the time-honored method for doing this.
Make a new year's resolution in early 2022: Visit more stores; do more store walks. Q1, in particular, is a good time to visit stores to get the lay of the (post-holiday) landscape.
However, since you can spread yourself across only so many store walks, might we also recommend...
Too often, brands lose sight of what's really happening on store shelves—with planograms, prices, and shelf tags. You can't win any contest if you can't see the playing field.
This is why store walks are so vital.
However, for a specific retailer and category, imagine being able to observe store shelves—as shoppers see them—across 100 stores every single week. To be able to inspect planograms, prices, and shelf tags as they're being executed inside stores.
Store by store, planogram by planogram, SKU by SKU.
But 100 stores every week is too much to accomplish by store-walking alone.
So, in the new year, rely on technology to keep a running inventory of store shelves.
By way of example, Field Agent has a partnership with visual intelligence platform Shelfgram to furnish brands with a week in, week out view of store shelves—for any retailer, across hundreds of stores.
Such solutions take store-walking to a whole 'nother level.
Let’s go back to old reliable: the retail success formula. Those who win at retail get inventory, space, and execution right. Consistently.
We’ve already chatted inventory. Let’s chat space.
Space is scarce in stores. The shelves of mighty chain stores contain the most valuable and contested real estate in America.
Now consider that proximity is everything in brick-and-mortar retail. The more space you command inside stores, the more proximal you'll be to shoppers and, naturally, the more sales you’ll make.
Not surprisingly, then, brands fight tooth and nail for as much space as they can get, whether on shelves, on displays, or at entranceways.
If you want more floor space in stores in Q4 and/or next Q1 (you do), now’s prime time to build that case. Retailers give more space to proven winners. I’m stressing the word proven.
Can you prove to your buyer that you would have sold more units of a SKU in Q4 or Q1 had your brand been given more shelf space or displays?
Don’t expect your buyer to arrive at this conclusion themselves. Instead, be proactive at the tail end of Q4 and into Q1, collecting evidence—data, photos, analytics, insights, etc.—to make your argument.
You'll get more space if you can prove you’ll use it to win more sales for the retailer.
Increasingly, product-detail pages are where sales happen. You know this already.
So, is your ecomm house in order?
Q1 is an ideal time to optimize and finesse your product pages, to ensure they’re ready for the months ahead—including the sales avalanche that happens every Q4.
Our resource, How to Build Product Pages that Win Sales, quotes Ryan Monigan, VP of insights and strategy at SKU Ninja, an ecomm agency specializing in Walmart.com:
“Creating high-quality content that appeals to both the shopper and the search engine is the best way to boost your items’ traffic and sales.”
So now’s the time to whip those product pages into shape.
Think SEO, storytelling, reviews, and…
We like to say “a picture is worth a thousand sales.”
Our own research shows online shoppers consider “quality photos” very important to their online purchases, more influential than even product reviews and descriptions. "High-quality images convey you have a high-quality product," said Heather Paul, director of content for OneStone ecomm agency.
All across the omnichannel landscape (product pages, digital ads, in-store displays), your product photography is either building or undermining your brand, its reputation, and its sales.
Q3 and Q4, busy as they are, are the wrong times to rush photoshoots. Q1, on the other hand, is just right for investing in your visual identity and presentation.
And today, as this example from Aisle 9 shows, professional brand photography has never been easier to come by.
Social proof. Few things are more powerful in generating sales.
And social proof now spreads faster and more decisively than ever.
Today, social proof most commonly takes the form of online reviews, user-generated content, and, of course, good old-fashioned word of mouth. And because these are often distributed over and through digital channels, brands now have some control over them.
That's right, control over social proof. Crazy.
A CPG company, for instance, can enlist shoppers to purchase their products, try them at home, and then either write reviews online and/or become a repeat buyer.
And it’s best to get serious about stocking-up on social proof early in the year, before things get all crazy in Q3 and Q4.
No, not that kind of shifty. Another kind.
Think about the importance of…
For some categories, Q1 is Q4.
There’s great demand for their products, which sometimes results in widespread out-of-stocks.
If you’re one of these categories, you need to be shifty with your online ad spend in Q1. By this we mean you should be both vigilant and opportunistic with your ad spend during times of high demand.
After all, online retailers will often penalize brands—sometimes heavily—for out-of-stocks. So why advertise on ecommerce platforms when your stock is low there?
Instead, shift your ad spend to platforms where stock is ample.
Get shifty.
The “E” in the ISE retail success formula.
Too many brands press on the gas during the sales phase (when they negotiate a retail program with their buyer) but blindly coast through the execution phase. They assume their program—product, price, place, promotion—is being executed properly inside stores.
That's dangerous.
Mistakes happen at-retail. We’re talking about a very complex system with many moving parts. Despite best intentions, retail partners often overlook the finer details of your retail program.
Unless you take compliance seriously.
This means not burying your head in the sand during Q1 this year, especially if you have a lot riding on this three-month period, but keenly observing whether the 4Ps of your retail program are being executed correctly by stores.
As this primer describes, retail auditing is the tool for ensuring effective execution.
And not just reactive auditing...
You may be thinking, “We do audit, all the time.”
But how do you audit?
Does your brand audit only when it thinks there’s a problem at-retail (i.e., sales are already being lost), or does it have an ongoing auditing program that finds compliance issues before they undermine sales?
This is a crucial distinction. One leads with a problem; the other leads with a solution. Keep in mind: With mammoth chain stores, compliance issues can be spread over thousands of stores. Yikes.
Consequently, a proactive auditing program, one that regularly spot checks stores for issues with your retail execution, really should be par for the course. Too much is at risk.
And there’s no better time to start auditing proactively than in a new year.
You might say it’s a good time to make some auditing resolutions.
When do new products launch? Often, at the beginning of the year, so they can build up recognition, social proof, and sales early, well before the Q4 buying bonanza.
As we’ve written elsewhere, “new products always start from behind.” They’re unknown and more risky to retailers and shoppers alike.
Driving trial is, thus, crucial for new products—to make up ground on incumbent brands. So what aggressive steps can your brand take now to generate trial and ensure successful product launches in 2022?
Trial can’t look the same way in 2022 as it did in 2019. In-store product demos and sampling, while still relevant, are hardly a panacea any longer for a successful product launch.
Consider digital, “sales-driven” methods for driving trial and launching products. They’re ideal for driving trial in uncertain times, just like those in front of us.
“Leaders are learners.” And not just among individuals, but among product categories as well.
Want your brand to lead the category? Your brand will never rise above the collective retail IQ of your team.
So, learn. Learn a lot. Learn with purpose. Make your team a team of learners.
About shoppers, competitors, trends, and so on.
But face it: The thick of Q4 isn’t the best time for books, reports, webinars, podcasts, share groups, and lunch-and-learns.
Now’s the time to go into sponge mode. Q1.
Get to learnin’.
Given the somewhat slower pace, Q1 is also a good time to go shopping for retail solutions that will support you and your program throughout the year.
Listen, please listen: Retail tools, solutions, and services are often very easy to get into, but extremely difficult to get out of. Like a Mazda Miata.
Because of contracts, yes, but also because of the constraints on your resources. Your budget, time, energy, and attention can only spread so far—and it’s unwise to spread such precious resources over more than one retail solution (for any given problem).
Here’s our suggestion: Think value when shopping retail solutions in late Q4 and early Q1. Find tools that'll give you the most benefit for the least amount of budget, time, energy, and attention. Don’t overcommit yourself to tools that work you…
...rather than work for you.
Field Agent offers exactly that: an assortment of retail solutions that demand little of you while delivering a lot for you.
Auditing. Merchandising. Insights. Reviews. On-Demand Sales.
Contact us today and let us show you how.