Navigating retail growth? Let same-store velocity be your ‘North Star’

Velocity isn’t just another metric; it’s a way to align your retail strategy with consumer behavior to optimize performance at every store. Here, we provide a roadmap for CPG brands seeking sustainable market success with same-store velocity as their guide.

Any CPG professional can understand the challenges of staying ahead in today’s ultra-competitive, fast-moving consumer marketplace. With an abundance of strategies and metrics to consider, finding the right path can be daunting. 

In his celebrated book “Ramping Your Brand”, James F. Richardson emphasizes the efficacy of prioritizing same-store velocity, positioning it as a north star that brands can follow to unlock growth and gain market share.

According to Richardson, velocity isn’t just another metric; it’s a philosophy that emphasizes understanding your existing retail placements and optimizing their performance. It’s about digging deeper into consumer behavior and aligning your products with an audience’s true needs and motivations. By focusing on same-store velocity, you’re not merely chasing numbers; you’re building brand loyalty and setting up a strong foundation for future expansion.

Let’s explore how same-store velocity can help guide your CPG brand’s growth and chart the course for future expansion.

Sales velocity and why it matters

Velocity is one of the most critical metrics a supplier can use to inform sales strategy. 

Velocity indicates how quickly your product sells in any given store, measured in number of units sold per week. Velocity metrics are often used to convince retail buyers to add a product to their assortments, and some might have minimum velocity requirements before they buy. 

In-store velocity can be very high if the product is in the right store with good shelf placement, but the opposite can also be true. If you focus too much on expanding your product into new accounts vs expanding into the right ones, the product will end up underperforming and hurting your average velocity numbers. 

So the most important thing is to choose the stores that make sense for your product and brand. But, what if you get it wrong? What if you end up in the wrong stores? What do you do then?

That’s where data comes in.  By digging into velocity across different banners and geographies, you can:

• Tell the sales stories that highlight success
• Find opportunities to increase velocity where it’s lagging
• Capitalize on opportunities where sales are already high

By using data to do these three things, you set the foundation for a healthier product life cycle and pave the way for expansion — with impressive sales data to back you up. 

In-store velocity can be very high if the product is in the right store with good shelf placement, but the opposite can also be true. If you focus too much on expanding your product into new accounts vs expanding into the right ones, the product will end up underperforming and hurting your average velocity numbers. 

How to optimize velocity in existing accounts

Now that we understand the benefits of optimizing same-store velocity, let’s talk about the best ways to accomplish it.

• Identify the high performers
  
  Knowing what a store is doing right and researching its demographics will tell you what’s working and who’s buying. The answers you get might surprise you, and will help you get more specific about where and how you’re marketing your products. An easy way to track daily sales velocity across individual store locations is using Crisp velocity dashboards, which aggregate your retail data into a central, easy-to-read visual format – and help you easily drill down by region, retailer, product, store format, and more.

• Work closely with underperforming stores
  
  The underperforming stores you identify will indicate room for improvement. Is your shelf position ideal? Will a promotional display help? Collaborating with retailers goes a long way in proving you are invested in their success and builds a stronger partnership. By analyzing velocity data together, you can identify trends and patterns, allowing you to make data-driven decisions that align with the store’s unique needs and preferences.

• Support velocity with a strong supply chain
  
  Monitoring velocity is crucial, but recognizing and responding to unusual patterns is equally vital. For instance, unusually low velocity could indicate out-of-stock situations, or voids. This means you might be running through more product than anticipated!
  
  Crisp’s void dashboards utilize a combination of velocity data and other sales metrics to identify where your products should be in stock but aren’t. In these situations, it’s essential to quickly work with your buyer to adjust inventory levels and/or forecast to meet demand.
  
  As you work on improving sales velocity, it’s expected that larger orders will be necessary to maintain supply, and data offers the clarity to manage this. Responding promptly to changes in consumer behavior, illuminated by real-time data insights, will help you build trust with your store accounts and foster customer loyalty.

• Create store-specific marketing initiatives
  
  Customer groups can vary significantly, so marketing is never one-size-fits-all. Optimizing velocity at the store level requires a creative, collaborative approach to ensure your messaging reaches the right people in the right way. Consider conducting market research and running targeted campaigns that reach stores you want to improve in a meaningful way.

• Connect with customers through in-store demos
  
  A powerful way to connect with consumers and improve sales velocity is through conducting in-store demos. These sessions not only allow you to engage with customers, but also with store employees, turning them into informed advocates for your products.
  
  Apart from showcasing your products, these demos allow you to solicit opinions about your products, your category, the location’s demographics, and more. Such first-hand feedback can provide unique insights beyond what traditional data can offer, enabling you to fine-tune your strategies.
  
  Tip: For a comprehensive solution to manage these on-the-ground efforts, our partners at Promomash offer an all-in-one platform for planning, executing, and tracking the performance of in-store demos.

• Keep measuring
  
  Improving store-level velocity is never one-and-done. Even when the numbers improve, and velocity is trending upward, things can change quickly. Consumer perception, the local economy, and competition can all impact results. Tracking velocity consistently helps your team respond quickly to fluctuations before there are any lasting repercussions. 
  
  You can’t be everywhere all at once. Real-time data is essential to track velocity, inventory levels, and sales trends at the store level. Crisp’s sales dashboards put critical, actionable insights at your fingertips. The harmonized data allows you to navigate between states, regions, and individual stores to identify the sweet spots and gaps in your territory.

Improving store-level velocity is never one-and-done. Even when the numbers improve, and velocity is trending upward, things can change quickly. Consumer perception, the local economy, and competition can all impact results. Tracking velocity consistently helps your team respond quickly to fluctuations before there are any lasting repercussions. 

Trusting the process

In Ramping Your Brand, Richardson explains what can happen if you make year-over-year velocity your north star:

1. You will naturally make consumer-focused decisions. 
2. Consumers who love your product will buy it repeatedly, and tell their friends about it.
3. Word-of-mouth will reduce the cost of acquisition for new customers.
4. New consumers will love your product too, and the cycle will repeat itself.

After optimizing sales velocity in existing placements, and subsequently building customer loyalty, you can leverage Crisp sales dashboards in line reviews to prove the success of your efforts and expand into new markets. Starting strong and repeating the cycle with new PODs will impress buyers and help forge strong retailer relationships that create lasting success. 

Ready to gain insight into how your products are performing at the store-level? See how your data can work for you, book a demo with Crisp today.