Event Recap: CPG Growth and Sales through the Holiday Season
A recap of a webinar held on October 19, 2022
It’s hard to believe that the annual shopping season is almost here! For consumers, it’s the most wonderful time of the year, for CPG businesses, it’s an outsized opportunity for growth. On October 19th, Naturally Network was joined by a seasoned group of industry experts to discuss CPG Sales Growth through the Holiday Season. Read on for key takeaways!
Miss the event and want to the full experience? Check out the video recording:
Key Takeaways:
Price correctly + start selling early.
Nic Keneipp, Chief Customer Officer, New Nexus
What we are seeing: Holiday Products are already in warehouses and stores, making their way to the floor the earliest we have ever seen. Dollars will be pulled forward as a result, meaning the spending season probably won’t see drastic compression with people waiting until the last minute like they usually do. In-stock from the beginning and early marketing plans will ensure a successful sell thru, lowering any markdown liability you might have.
What is happening: Target has started their Target Deal Days THIS week and NEXT week Amazon kicks off their Prime Early Access while Walmart is rolling out their NEW Rollbacks & More program. It’s a Retailer Race to secure those holiday shoppers EARLY!
How to prepare: You should be tracking inflation in your specific categories so you know where key items will be priced at early on. For online business, it is easier to start high and go low as the season progresses. For a store business, starting out at the optimal price point to move product quickly will be key. You should already have a daily sales forecast built out for your holiday items and as the season progresses, if you are falling behind on forecast, deploy markdown dollars earlier and pull up marketing tactics if possible. If you are ahead of plan and will potentially run out of stock, do not chase extra product unless the retailer confirms they will not issue you markdown invoices.
Pick the best partners and be the best partner.
Anne Hallock, GM of Platform, Flowspace
One key insight for sellers is that, even if your business isn’t seasonal to the holidays, your vendors’ business is! Help them get it right by communicating effectively and planning in redundancies where possible.
Communicate forecasts to partners early and often
Communicate with your customers: start with your shipping cut-off and work backwards
Create redundancy: identify your single point of failure and FIX THEM
Budget wisely: increase your budgets in Q4 for expenses like storage, shipping, labor
Seek Partners not just vendors: do you have systems in place that can scale?
Finance Wisely.
Jim Shehigian, SVP, Aion
Don’t wait – put the work in now
The holiday season can be an enormous growth opportunity. This could be the beginning of the next stage for your business. Financing isn’t urgent until it is – but waiting until it’s urgent leaves you with less time and fewer options. This could mean missing out on growth opportunities or overpaying for financing.
Be extremely intentional about equity financing
Equity, debt, convertible debt, vendor financing – there is a place for each in the growth of your business. But those places don’t all overlap. Know the differences in financing options so you can choose the right solution for your business. Don’t dilute your equity to fill one big order or get through one busy season. Sell equity at the highest point of your valuation curve that you can.
Find a financing partner that knows your business
You shouldn’t have to educate a lender or investor on the unique nature of CPG retail - your financing partner should be a trusted source of knowledge and insight for YOU, not the other way around.
Keep your financing structure simple and scalable
Juggling different financing sources for each of your business needs quickly becomes cumbersome and costly. Finding a partner that scales up to several $million as you grow often means less work on your end and more favorable financing terms.
Be Aware of Holiday Purchasing + Consumer Trends
Octavio Hinojosa, Co-founder, Wise Athena
During this Holiday Season, consumers are very price-conscious and are looking for the best deals.
The CPG manufacturer must establish a more intelligent pricing and Trade promotion strategy, taking into consideration correct packaging, correct sizing, but more importantly, plan on updated price elasticities, to avoid losing sales, and also avoid leaving money on the table.
A look at how consumers plan to do their Holiday shopping. Will the consumer plan to spend more time in conventional supermarkets or do their shopping online? It is necessary to be able to understand the role that PRICING plays in the different distribution channels and the possible cannibalizations between channels.
Inflation effects in shoppers’ Holiday purchase behavior. In recent months, and until July or August, gasoline was one of the main drivers of high inflation. But in August, even with the drop in gas prices and a visible stabilization of inflation, the consumer price index continues to show increases. The consumer remains cautious and careful in what to spend and how to spend money. As a CPG manufacturer, you must continue to constantly monitor purchasing behavior, and possible changes in demand caused by your prices or promotions. That is, you must constantly monitor price elasticities, but in more detail, how they change over time, per channel or per banner.
Shoppers are becoming increasingly selective when it comes to finding the right products at the right price. If we talk about price elasticity, it is a change in demand caused by a reduction or increase in prices, today more than ever, the consumer is more aware of paying the right price. The possible result is that consumers can:
Switch stores or channel
Buy less than normal
Buy a less expensive product from another brand (Private Label or cheaper competition)
Postpone purchases
Each manufacturer must understand the elasticities of their products and categories in order to maximize their promotional budget.
Member Resources
Want access to more data so that you can continue to make the right decisions for your business? Naturally Network members have access to the SPINS small business Liftoff Data Bundle, learn more here.