Scaling for success: Things to consider before mass retailJump to content
Getting on mass retail shelves – and in particular, Target – is the ultimate dream for many entrepreneurs. With more than 1,900 stores in the United States, Target is the gateway for small biz owners to get their products in front of guests nationwide. With that in mind, the Target Accelerators team caught up with two program alumni, Calvin Quallis, CEO and Founder of Scotch Porter, and Pauline Idogho, CEO and Founder of Mocktail Club, to learn about taking their brands from small businesses to mass retail.
The impact of capital to supercharge your growth on-shelf
Before you’ve even landed a business contract with a mass retailer, take a pause to learn about potential fees and evaluate your financial position. That’s a critical first step to thinking about – and eventually navigating – business on a much bigger scale, says Pauline. After all, access to capital is critical to achieving scale, and it’s helpful to actively think about the funds needed to finance priorities like marketing, distribution and more ahead of signing the dotted line on a contract to do business with a retailer. Pauline’s advice? Be bold about seeking investors as you think about scaling. She’s a fan of pitch competitions as a good way to identify investors.
As for her winning tips? “Make it clear to the audience, judges and investors why you are the right founder for their funds by explaining your value proposition, market traction, unique fit in the industry and introducing your team,” she says. She also recommends seeking out debt and inventory financing as alternate funding sources to help cover the costs of entering retail stores. Last but not least, don’t underestimate the power of networking, notes Pauline. “Although it can be difficult to find investors, networking as much as possible and having a large funnel helps.”
Laying a smart foundation for success
Once you have received a business award, Calvin suggests three key tips to consider as you lean into this major milestone for your brand.
1. Learn about the financial resources and human capital needed to set yourself up for success. A couple of questions that Quallis recommends you ask your buyer partner, below:
- Have you interviewed brokers to help manage the relationship?
- Will I need an internal marketing and sales team in place to support launch and beyond, or will there be consultants in place to help me build out and drive a go-to-market plan?
- What capital resources will be required for marketing, inventory and people?
2. Understand what success for your buyer looks like. This can be a simple conversation between you and the retailer’s buying team to set expectations for your product. Remember, you have a voice and say in how your product performs, so feel empowered to voice your thoughts and perspective, and be honest about your current position.
- Calvin notes that based on your velocity or sales per SKU, you may need to build out a go-to-market strategy with push-and-pull marketing activities that will help you meet or exceed that benchmark. “I have quickly learned that getting into mass retail is one thing, but staying on the shelves can be an almost Herculean task,” says Calvin, whose products have been at Target for three years. “You must execute the right push-and-pull marketing activities to drive velocity and your brand positioning must be differentiated to stand out on shelf.” As for how you get there? It all goes back to those early – and honest – conversations with your buyer and understanding their metrics for your success.
3. Understand your retailer’s requirements. Sounds easy enough, right? Not so fast, says Calvin. Key to meeting retailer requirements is a thorough understanding of the resources you need to set up against those requirements – especially when it comes to the manufacturing and supply chain process. Here’s a few things to think about as you prepare for partnership:
- Create an invincible manufacturing and supply chain process, says Calvin. “It’s critical to your success,” he notes, adding that founders should explore working with a Demand Planner or Supply Chain Operations consultant if they don’t have members on their brand’s team in those roles or individuals on their own team.
- It’s imperative to have reputable manufacturers that can deliver high-quality products on time and meet safety standards. Plus, the pricing structure and margins have to be at a place where you can sustain and grow your business.
- Lastly, make sure that you have a backup manufacturer for the SKUs that bring in 80% of your sales, advises Calvin. “You need to have one or two other manufacturers in your back pocket that have produced samples of your product, that meet your needs, and have the availability to produce your product in the chance that your main manufacturer can’t.” It’s an important step as you ensure you have a large quantity of necessary inventory to take advantage of any upside opportunities, Calvin notes. Another important exercise? “Constantly look at your slow-moving items to decide what to cut to preserve cash and reinvest into push-and-pull marketing activities,” he says.
And while the steps and key activities to prepare for launch and grow at a retailer can seem daunting, the ultimate satisfaction is growing more in connection to your target customer. “It’s a gratifying feeling to have something that was once an idea come to fruition on shelf, and provides,” says Calvin.
As for Calvin and Pauline’s final pieces of advice for aspiring big box vendors? “Really spend time thinking about your brand’s positioning and story, and the ability to clearly articulate who you serve, why you are so passionate about serving them and how your product or service solves an important pain point for the customer,” advises Calvin. “It’s important because it helps you to better connect with your customers to build credibility and trust … Great positioning helps with attracting consumers, retailers, employees, and if there’s interest, investors.”
“Start building a great team of individuals with complimentary skill sets that you can enjoy the journey with,” shares Pauline. “Despite the constant challenges, it is absolutely rewarding to watch the hard work pay off.”
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