The negotiation of shelf-headers with supermarket chains is a key element in the commercial strategy of brands. These privileged spaces at the ends of shelves offer maximum visibility for products, helping manufacturers to boost sales.
So it's vital to know how to convince your retailers to place your products in these strategic locations. Sidely invites you to take a look at the challenges of shelf-heading for brands selling their products in supermarkets: we'll start by covering the main definitions and issues, then propose a six-step action plan.
But first things first: what is a "TG"?
A gondola head - or TG for short - is a promotional space located at the end of a department in a store, usually at the intersection of the main aisles (on the side of the center aisle or the circulation aisles). It is designed to attract customers' attention and highlight certain products. Gondola headers are considered strategic locations in a store, as they offer maximum visibility and are often the first areas customers see when entering a store or department.
Gondola head features usually include a special structure that may be separate from the rest of the shelf, such as a lifting platform, advertising panels, promotional posters or special displays. These spaces are often used to highlight promotional products, new products, seasonal items or special offers. In supermarkets, gondola headers can also be used to increase traffic in a particular area, or to boost sales in a particular category through special product display.
As a result, manufacturers and retailers regularly negotiate access to these privileged locations, which can have a significant impact on the visibility and performance of products in store.
Shelf-headers are generally allocated at the time of annual negotiations with retailers. But there are strategic moments in the process, which can vary according to each retailer's policies.
Putting your products at the head of the aisle can be done on your initiative, as part of a product launch, special marketing events, cross-promotions with other brands, the launch of an advertising campaign or even pirate operations, for example, to clear stock.
In some cases, a retailer may offer you a headliner because they feel your products fit in with their strategy at a given moment, for example as part of seasonal promotions or annual reviews of the category concerned. This scenario is less common, however, as retailers generally avoid putting themselves in a position of demand.
To stay alert to joint opportunities, trade marketing recommends remaining proactive outside annual negotiations, and holding periodic negotiation meetings to discuss performance, marketing strategies and contractual terms. These meetings can also be an opportunity to discuss placement on display shelves. The Area Manager's role is therefore not only to check that the TG strategy is being implemented correctly, but also to initiate discussions with department heads and store managers during customer visits, in order to obtain new business.
To get the maximum number of shelf-heads, and maximize sales performance, manufacturers need to work on their strategy upstream. A number of points will make up a global action plan.
We've grouped them into six key stages.
In France, the mass retail sector is divided into two types of network: integrated stores, which essentially apply the guidelines laid down by the chain to which they belong and obtain their supplies from central purchasing agencies, and independent stores, which have much greater latitude in terms of assortment, layout and promotional strategy. This difference means that your brand will need to deploy marketing and sales tools tailored to the target network. For example, sales to integrated retailers lend themselves more to annual, centralized negotiations. In this context, you'll need to determine a global strategy, including the placement of products at the head of shelves for all or part of the brand's network.
If you're working with independents, you're thinking in terms of each sales outlet. If the stakes seem less vital, this organization could cost you a lot in terms of resources and sales time in the field. But sometimes it's worth it: negotiations with independents are often quicker and more direct, especially when the commercial relationship is good. In such cases, prioritize your sales outlets to increase your efficiency even further!
What's more, even with integrated chains, some retailers have a policy of giving their outlets a certain amount of freedom. So, the right strategy is the one that maximizes results in your network. This may involve direct discussions with category managers, store managers, or head office negotiating teams, depending on the network's structure and business practices.
To find out more: Everything you need to know about supermarket distribution
If you work with independents (or integrated stores with a certain degree of latitude), you may not have the resources to cover your entire network. So you'll want to determine the criteria foridentifying priority points of sale, and therefore eligible for shelf-head product placement.
These may be store types (strata), groups of outlets chosen for their performance (sales, footfall, etc.), your performance in terms of sales or market share (good or in need of improvement), or a segment of stores meeting a common commercial objective (increasing brand awareness, countering a competitor's advance, etc.).
Example
Your brand has a very high awareness index in Brittany. On the other hand, people in Lyon are still discovering your products. In this situation, you might choose to focus your TGs on the Rhône-Alpes region to support your acquisition-oriented sales strategy.
On the other hand, if your ambition is to strengthen your existing positions and defend your shelf space in the West, you'll prefer to concentrate on your best customers. Generally speaking, they're the ones we take care of first."
Head-of-shelves are highly strategic, and their turnover rate is often short: some retailers don't hesitate to change the products every 15 days to satisfy the need for novelty among regular customers. That's why it's important to do everything you can to boost results: merchandising, number of facings, complementary products to keep the shelves moving, etc.
In order to implement a strategy that will have an impact across the whole range (yours and the retailer's!), get your category manager involved. As we saw above, highlighting a product can boost sales of the product family to which it belongs. By enlisting the help of an expert in category analysis, you can build an optimal sales strategy.
Specifying the terms of the agreement in the distribution contract is not enough. In the field, teams need to be made aware of the best practices that will enable the system to produce results.
It's therefore advisable to draw up a kind of specification for implementing your OPs at the top of the shelves. This document should specify, for example
Describe the performance monitoring process
These guidelines will be useful not only to your partners (department managers, category managers, store managers, etc.), but also to your sales staff and area managers. During their sales rounds, they need to be able to pass on information that will enable them to produce reliable and relevant reports. To check that your products are correctly positioned in the aisle headers, and to monitor performance at the point of sale, equip your area managers with a mobile CRM designed for sales in supermarkets.
Evaluating the return on investment (ROI) of your head of shelves will then enable you to justify your strategic and operational choices. What's more, in addition to supporting your corporate strategy, performance analysis will be useful in the next phases of negotiation. Keep in mind that a success achieved in a particular store or outlet gives you arguments to sell similar operations to other customers, and gives you leads to success for other implementations!
To increase your chances of securing positions in end-of-shelf displays, it's important to identify the benefits your partners can derive from them.
For your retailers, shelf headers are more about generating traffic in adjacent aisles than making margin. In fact, TGs are mostly used to highlight promotions, and are therefore synonymous with low profitability. On the other hand, when a customer's attention is captured by the promotional zone, they are more likely to continue their journey in the aisle within their field of vision. Understanding this mechanism can help you find arguments to "sell" your TGs to department managers, such as :
Finally, adopt a trade marketing strategy by encouraging your sector managers to collaborate with their counterparts in department heads, store managers and other stakeholders. Promotions should benefit everyone involved, so it's only natural to design them together!
This logic applies above all to one-to-one discussions with sales outlets. But if you're working with integrated networks, you need to be prepared for negotiations with head offices. That's what we're going to look at now.
To begin with, it's essential to make the most of your customer data. As aisle headers are often used to attract shoppers to a particular area, your retailers need to ensure that the products displayed there meet consumers' needs. So, if you have surveys, studies or other mystery shopping data, you can demonstrate the value of placing your offers there on the basis of reliable and convincing data.
If you have access to checkout data, you can also use your sales reports to show the increase in sales of your products in stores that have already validated the operation. Explain how your product can attract more customers, boost sales and improve category profitability. And if your product has already been sold in the store, present data on its past performance, such as stock turnover rates, profit margins and customer satisfaction.
Remain flexible in your approach to negotiation. You know that your distributor won't accept your demands without something in return. In anticipation of this, draw up plans A, B and C, etc., and artificially inflate the number of "demands" to obtain the most strategic ones in the end. For example, if you're sure that your distributor won't agree to give you the checkouts, include them in spite of everything, so that you can let go of something and insist on the top of the shelves in return.
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