If you’re a manufacturer and you bring a product to a retail buyer in an oversized package that doesn’t fit the shelf, well…expect grief. In an era based on category management discipline, retailers are no longer so tolerant of odd sizes that can’t be easily put on the shelf.
“Retail attitudes towards bonus packs, for example,” says one West Coast retailer, “are not very positive any more. The market has evolved over the past several years, and changed from when buyers typically welcomed promotional items with open arms as business-builders.”
The philosophy in place is category management, and its tenets are well defined, precise and strict. One of the most important is planogram integrity, and planograms are the result of much thought, research and effort to achieve a sales-and-profit goal. They most certainly are not haphazard (although they may get that way in the grim reality of the store shelf) and are not open to unplanned, on-the-fly changes.
If the new item doesn’t fit into the shelf elevation, then most category managers will reject it, and the same holds true of items that are too wide. Putting an item on its side to make it fit isn’t a solution. Items that are too wide take up too much space and erode the planogram’s ability to generate profits by restricting the number of facings and products. On-packs can particularly be a problem.
“Quite frankly,” says a retailer, “if it isn’t a critical item, I won’t take it.”
But, like all strict rules, planogram integrity can be modified, albeit not often. The situations that call for a bending of the rules are not surprising: a really good new item that can bring new dollars to the shelf so the retailer needs to carry it, a product backed by massive ad spends, a strong line extension of a really powerful brand and similar issues. In these cases, the category managers may be willing to make do, particularly if they can put the item on peg hooks.
A recent example is Zyrtec, 30 count. The packaging of this stock-keeping unit of the extremely popular recently introduced allergy medicine is three times the width of the actual pack. However, many retailers “made do” with a variety of solutions because of the sales power of the item.
Fortunately, oversized products are infrequently offered due to the universality of category management. Estimates are that the occurrences are well below 5%. Nonetheless, it is incumbent on food and beverage companies to make sure that product packaging fits within the guidelines set by the retail shelves. And if special-sized packaging appears to offer a marketing advantage, retailers should be sampled as to its acceptability.
“There’s pressure on manufacturers,” says the retailer, “to make sure the packaging fits the shelf or, if it doesn’t, that it’s acceptable to us. The worse possible scenario is that the category manager doesn’t know there’s a problem until the presentation. At that time options are few. It’s important to make sure you’re right.” F&BP