Get Real on Barriers to Premium Uptake in Retail

I know “barriers” is a downer word, but it’s not just a marketing concept. It’s one of the more sobering realities entrepreneurs must face as they pursue growth. Deny barriers to trying your brand at your peril. Some premium innovations have few obstacles to uptake (e.g.,SkinnyPop), while others have many (kale chips). The more barriers exist, the smaller the initial addressable consumer audience will be; the more niche you are. However, this may NOT be a real problem for revenue growth if your category is consumed daily. But lots of barriers to uptake (andrepeat) affect the relative effectiveness of trade promotional tactics across channels.

How?

Well, for example, over-expansion of a very niche offering into conventional channels with paid end caps may produce a trial surge with meager repeat %s, something which you’ll only discover on the next paid end cap rotation in the channel. Ouch. At this point, your promotion will have become a money loser, and you may even find yourself on the path toward delisting. This is because, in conventional channels, niche offerings appeal to a minimal % of the general shopping population at the average store(unless you’ve done a masterful job at negotiating a targeted store roll-out). Visibility does encourage more ‘hey…why not?’ trial (because more shoppers who were not hunting for your innovation now discover you), but not necessarily more trial from highly intentional consumers.

The more your product requires a ) specialized knowledge or b) a sensory trade-off to appreciate, the more you need highly intentional consumers to seek you out if you want stable growth. And the more common promotional tactics designed to generate high visibility, like paid end caps in-store, will cause misleading revenue surges based on weak, if any, loyalty. If your brand is a me-too, i.e., a not well differentiated, premium player, then your fate will likely be even worse if you get too much visibility too fast in conventional channels. The only way that this strategy works is when you have an enormous budget to saturate a channel nation-wide until your line finds a steady base velocity over time once the distribution tsunami passes. This is a strategy I can not ever recommend to your average founder. It is a BigCo one. And it often fails even for them. And for many VC-backed brands whose stories rarely get told.

More resources for today’s premium consumer brands are always HERE. Updated weekly.

Dr. James Richardson

admin@premiumgrowthsolutions.com