Transactional Spending vs Promotional Spending

Transactional spending is something we all spend on, buying events, ads, shopper marketing, any type of marketing in store -- the goal of these is to drive sales in store, but also to build relationships with your retail partners.

Johnny and Colin break down the nuances in this episode of Bricks and Clicks.

What are events?

Events are time based promotions like flyers or endcaps. 

Not all partnership spend is created equal, the best investment you can make is into distribution and slotting. If you aren’t aware of slotting fees, it’s a fee to get a slot in the warehouse, and then the stores will pull that from the warehouse.

Instead of being intimidated by slotting fees, you can work to build a partnership with your retail partners.

What happens if it doesn’t work out?

Spending $500,000 on slotting fees may seem expensive, but it mitigates risk. If the grocery store brings on a new item and it doesn’t sell, they’ve already made $500,000. As a supplier, brand or manufacturer, you’re confident you’re bringing in the products that will be profitable based on your other sales.

When to spend heavy

Spending heavy can be intimidating so it’s important to know when to do it. In addition to launching new products, if a product is slipping in sales or struggling, and at risk of being discontinued, it can be worth over investing. When a buyer looks at this, they see you spending a bit more than a competitor. It’s not a solution to low velocity, but it may be enough to buy yourself some time in the category reset when a human sees you spending and not your competition. Especially if you have the inventory to move already.

Understanding what your buyers want, and what impacts their P&L will get things done. Trade spend is a big line item