Once in a blue moon, retail organizations may end up stumbling onto a product that practically flies off the shelves of its own accord. But most of the time carving out a market share in today’s competitive sales landscape requires a lot of strategizing in terms of which products a retailer sells at which price points to which consumers.
Here are four tips for setting an effective retail product strategy, meant to function as a roadmap of sorts laying out how exactly businesses plan to brand, market and sell their goods.
Create Highly Specific Product Goals
Wanting to sell large quantities of products is a start. But it’s important to go one step farther by setting specific performance goals pertaining to your product offerings. One simple way to evaluate your goals is to use the SMART acronym — Specific, Measurable, Achievable, Realistic, Time Sensitive.
Here’s an example from Bizfluent: A company is planning to launch an organic, dairy-free protein shake. The general goal is to become a top-rated supplier of protein drinks. But the SMART version of this objective digs much deeper and establishes concrete parameters for the goal. The company not only wants to become a leading supplier of organic protein shakes, but also “double [their] market share within one year and triple [their] revenue within two years.”
You get a clear purpose when you impose time limits and specific revenue targets— one capable of motivating teams to hit benchmarks and guiding the decisions they make along the way.
Use Data to Drive Product Decisions
The ability to make informed decisions that drive product strategy hinges on team members having access to the data they need when they need it. Retailers still dealing with silos of disparate data and reports gate kept by the IT team are missing out on the benefits of widespread data access throughout an organization — also known as data democratization.
Putting retail analytics directly into the hands of marketers, merchandisers, brand strategists, store managers and other employees allows them to ask questions about product performance whenever they want. Using a tool like ThoughtSpot’s relational search engine, users can input the exact phrases they want to query and receive an answer already formatted as an interactive chart.
Instead of relying on pre-built and scheduled reports, people throughout retail organizations can ask ad hoc questions and receive answers in seconds — which in turn inform the decisions they make pertaining to product strategy.
Need to know which types of products have been performing best lately? A simple query like “[growth of sales] [by category] [weekly]” would get you started; you could then drill down into the interactive chart to learn more about these product performance trends. In fact, users can glean insights down to the specific SKU number for more granular insights that go far beyond basic aggregate information.
Anticipate External Factors and Pressures
No company exists in a vacuum. Even the best-laid plans are subject to interference from external factors, like competitor performance, economic trends, customer demand, industry shifts and many more. Retailers need a way to predict how these outside influences will help or hinder their own product strategy — another area in which taking a data-driven approach will help.
Remember the Four Cs of ‘Marketing Mix’
A solid retail product strategy is multi-faceted; it considers the interplay between the four Cs of marketing mix:
- Consumer: Looks at the wants and needs of the consumer and how Product X can solve problems for buyers.
- Cost: Examines the total cost of purchasing from the customer point of view, including the time it takes to research and acquire said product.
- Convenience: Considers how easy or difficult it is for people to locate and buy a given product, and how this potentially affects purchasing decisions.
- Communication: Looks at all marketing, branding, customer service and public relations communications as a collaborative audience dialogue.
Setting an effective retail product strategy is a matter of empowering teams to set detailed performance goals, make data-driven decisions and anticipate outside factors before they affect sales.