CPG Brands: Dominate Your Category With a Logistics Strategy
You’re a CPG brand and you’ve done the hard work. You’ve taken your brand from an idea to physical product, determined packaging and pricing, and landed shelf space at a retail store.
From here, your sales team usually takes over the relationship with the person who decides if your product gets and stays on the shelf: the retail buyer. While salespeople are fantastic at closing deals, their expertise doesn’t usually include understanding each retailer’s delivery expectations or how to meet them logistically.
What many don’t know is that retailers set high expectations for your brand’s delivery performance to combat stockouts. Not meeting those requirements often results in huge fees, damaged retail relationships, and missed sales from not being on the shelf.
Andrew Lynch, President and Co-Founder of Zipline Logistics, explains, “Your retailer wants the same thing you do: product on the shelf that drives sales and foot traffic. If you’re not on the shelf, you’re only driving frustrated customers to buy the same product elsewhere. This is not good for your brand, and not good for the retailer.”
To better understand why certain brands get on shelves over others and how CPG brands can stand out in the competitive market, Zipline Logistics surveyed retail buyers from UNFI, Costco, KeHe, Giant Eagle, Target, and more.
Survey insights reveal that 90% of retail buyers say a supplier’s ability to deliver on time impacts their purchasing behavior of that brand. In fact, 66% have ended relationships with suppliers over delivery issues.
Delays happen, but how you communicate and work through them is make or break. Retailers want to work with the brands that give them the most visibility and transparency. Ninety-three percent of buyers report having anywhere from four to 20 product choices within a given category – so there’s nothing keeping them from booting a brand that doesn’t offer this.
You can read more about what retail buyers look for in Zipline Logistics’ 2022 Retail Buyer Report.
But wait, why did a logistics company ask these questions to retail buyers?
Just like retailers benefit from your product being on the shelf, so does a specialized 3PL. The more shelf space you land and expand at a retailer, the more freight you’ll be delivering. It’s a win-win for everybody.
“When we started Zipline Logistics, we knew selecting a niche market to serve and becoming experts in that space would ultimately bring the highest quality of service and the most value to our customers,” said Lynch. “In the last 15 years of our business, we have focused solely on partnering with CPG brands and learning everything there is to know about their business and the big-box retailers they ship into.”
Surveying retail buyers isn’t the only way Zipline Logistics has gained retail expertise over the years. The Columbus, OH-based 3PL has witnessed firsthand how using logistics strategically can lead brands to category domination.
Most of us have heard of a brand called Vita Coco, but do you know the secret to this multibillion-dollar brand’s success?
Lynch explains, “Vita Coco didn’t beat out Coca-Cola and Pepsi for market share just because they produced superior coconut water. They beat them because they had a superior set of operating principles.”
“They were all selling Tetra Paks of coconut water in similar flavors, but Vita Coco cared about getting their product on the shelf on time, all the time. As a result, they won ownership in their category and created a multibillion-dollar brand.”
Lynch shared that other Zipline partners like Fever-Tree and Poppi are operating with a similar set of philosophies and dominating their categories in turn.
“The road map to category leadership isn’t shaving pennies off transactional transportation costs. It also isn't breaking the budget to get product on the shelf come hell or high water,” said Lynch. “You can't buy logistics performance in retail, you have to be strategic, adaptable, and proactive.”
So, what does an intentional logistics strategy look like? For many brands, increasing order visibility and analyzing performance data is a good starting place.
KanoPI, Zipline’s proprietary shipper intelligence tool, provides shippers with high-powered visibility and data to track shipments, create organizational alignment, and analyze logistics performance data.
Tools like KanoPI reveal the inner workings of your supply chain and help identify areas that can be improved to maximize efficiency and cost savings. This can lead to actions as simple as asking for more lead time or adjusting must-arrive-by-dates with retailers. Or it can lead to fundamental shifts in your logistics strategy like consolidating shipments.
Simply put, freight optimization facilitates the ability to land and expand on the shelf and win category leadership.
To learn more about dominating your category with a logistics strategy, visit www.ziplinelogistics.com or call 888-GOZIPLINE.