Dreams and Nightmares:
Taking DR Products to Retail
By Anthony Raissen
The dream of nearly all DR marketers is to see
their product on the shelves of tens of thousands of retailers across the country. Unfortunately for many companies, this dream often
turns into their worst nightmare. But this is only discovered after losing thousands of dollars paid to retailers for
slotting and set up, and potentially millions of dollars of
product sitting on shelves gathering dust.
This dilemma often befalls very competent people
and successful companies because they don’t have the
arcane knowledge of how to work with retail chains,
each of which has different requirements. Following is a
quick look at some things every product marketer should
know before embarking on this slippery slope.
The Transition From DR to Retail
When launching a DR product through retail, ask
yourself the following five key questions:
1. Have I created enough awareness through DR advertising?
2. Is there enough demand to ensure sufficient turns?
3. Do I have the financial resources to pay for inventory, slotting and new item set-up?
4. Do I have sufficient human resources to deal with
the distribution logistics?
5. Can my production capacity keep up with the retailers’ demands?
The No. 1 question I get from DR clients is, “How
much money do I need to spend on media before I take
my product to retail?” There is no set formula. This will
depend on: the type of media used (print, radio, TV or
Internet) as well as the creative; consumer acceptance;
the number of competitors in the category; the repeat
purchase cycle; mass appeal and more. A quick rule of
thumb is to reach at least 70 percent of your primary tar-
get audience with at minimum frequency of 4. 5 impres-
sions per month before you tackle
However, you don’t always have to
think nationally. With the consolidation of the retail landscape, there are
fewer options available today, which
makes it difficult if you are not
equipped for a full national rollout.
However, it is possible to work with
national retailers and keep your distribution regional.
Another creative entrée is to focus your product in stores
that cater to specific socio-economic areas that match
your product demographics.
Choosing the Right Time and Correct Channel
Choosing the right time to roll out to retail is not as
simple as it might seem. Retailers today typically run on
a “Planogram” schedule. What this means is that for
every category in the store, there is an annual calendar
that determines when the buyer reviews the category,
adjusts the product selection, removes under-performing
products and brings in new products.
Drug, food, mass, health, convenience store and more
— when faced with this number of choices of rollout
channels, you have to be careful in choosing which is
the best match for you.
Match your products to the needs of the shoppers in
the specific channels. Understanding the demographics
and psychographics of each channel’s customers, as well
as the costs associated with doing business in each channel. Here are three examples of cost considerations:
• Health food stores typically deal with distributors,
so in order to do business in this category, you need
to have your product listed with a few health food
distributors. The distributor usually takes a 25-per-
cent discount off your wholesale price. This needs
to be factored into your cost structure.
• Drug stores deal directly with manufacturers or
with distributors. However, a drug distributor takes
less of a discount (+/- 10 percent) than a health
• Supermarkets typically charge a new item set up
fee, as well as a “per-store” fee. The per-store fee
can range from less than $10 to more than $30 per
store. While this may not seem like a lot of money
to an eager entrepreneur, it adds up quickly when
you look at thousands of stores.
These are some basic issues that one should consider
in determining if going to retail is the right choice.
Navigating the retail minefield is not for the faint of
heart. There are experts who can help you evaluate and
compile the right retailers, launch strategies and
resources. Construct the right foundation before embarking on building your retail empire. ■