People's preferences are ever-changing. How does an operator determine it's time to put new products into a micro market? Amanda Sulc, director of category insights and strategy at Accent Food Services, works with her team to figure out just that. They focus on category research and consumer feedback for the best results. "There is no right or wrong time to put new products in the micro market," Sulc explains. "But if after 4 to 6 weeks a product isn't doing well, replace it."
Keep track
Accent Foods uses a dashboard that keeps track of each individual product's trends. This includes how much it has been selling, the frequency and more, in days, weeks, and months. Accent Foods uses the information the dashboard generates about one product against the information about another. For example, if potato chips have been selling well in the last two weeks, they compare that data to how well pretzels have been selling in the same timeframe. Looking at data from two products in the same category is helpful in figuring out what products are trending amongst consumers.
It's also important to use social media to gauge brand awareness. "New brands are easy to get quick to market because of social media, so it's smart to use that to your advantage," said Sulc. Having a strong web presence is important not only for the website, but also social media, because social media allows an operator to engage with a much larger audience.
Have a game plan
In order to decide which products to swap out in the micro market, Sulc's team uses their playbook, which they put out three times a year. This playbook that they create has been far and beyond the most efficient way for Accent Foods to plan how they refresh their micro markets. Measuring the impact of keeping the micro market refreshed will help to keep you successful. Do this by comparing the revenue of a replaced product over the removed product. Impact can also be measured by the velocity in which the product turned. These are some of the things that Sulc and her team keep track of in their playbook.
Every trimester, Accent sends out a survey to brokers and manufacturers to determine if what they currently have in their micro market is meeting the needs of their consumers. An example question is, "Are we missing out on a product or category?" Followed by the unit cost to the distributer. Although simple sounding, the survey has come in extremely helpful for the team to figure out what products are missing and which ones to add.
Besides the survey, Sulc and her team look at both regional and national data. There might be a product that's not popular anywhere yet that could end up becoming a smash hit.
One of the important things that Sulc notes about changing products in the micro market is balance. "You have to match what you're taking out with what's on the backend," said Sulc. She also stressed the significance of careful placement in the planogram. For example, if you add a candy option, that doesn't mean you can take out a chip option. Sulc said it's important to remove a poorly performing SKU when the micro market is planogramed or has an incremental system due to space. "If you add something in, you have to take something out," she said.
According to Sulc, "it is essential that products remain refreshed." In order to do this well, it's important to know who your consumer is and what industry you're servicing. "Make sure you're continuously enhancing products," said Sulc.
Be mindful about more than data
Sulc said, "Although the majority of our '4 P's (product, placement, price, promotion) decisions' are data-driven, a key differentiator to becoming an innovation leader is to think outside the box for product placement." She says that demographic and industry segments can be helpful as a guide for placing specific flavor and taste profiles, however operators may often be surprised by items that they only thought would be successful in a certain area. Performing product tests in numerous, varied and diverse micro markets is the best way to understand where a product will have the highest potential success. "It may also help to test at different retail price points, run promotions and place in incremental rack/shipper displays," said Sulc. "By testing a product over a 30 to 45-day period, the operator can have time to introduce the product, place POS collateral (I.e. static clings, shelf talkers) to gain brand/product awareness, and then analyze the data to see if this SKU is going to be a viable option moving forward." Testing a product only in its suggested segment could limit its success in the long-run, she added.
What's trending in micro markets can vary a lot based on demographics, Sulc explains. Millennials, for example, want "whole" foods, such as those that are non-GMO (genetically modified organism). Local foods are also popular to have in a micro market, because the company can be advertised - sourcing local - and it's also easier to get things, as the products are coming locally.
One last thing to consider is the average unit per day / per market. This quota measures how much one product is making in its market (in every market it's in). Capture this data for each product as a segment within all markets, then separate the products out within each category and within each price point. Accent will use this data analysis to see if one product is at the bottom of its category at one location but is perhaps the fastest selling at another location. It would be worth keeping the product for the location it does well at, even if it needs to be pulled from the other location. Create opportunities by refreshing the mix of products in your micro markets. Success is a SKU away.
