“Getting inside the retailer is just 5% of a brand’s effort while moving product off the shelf is 95%,” says Rohit Banota, founder of Jump Accelerator and former regional business manager of beauty and grooming at Procter & Gamble. “I’ve partnered with brands that used to do $10 million, $20 million, $50 million a year in sales, and they pulled back from retailers like Sephora, Ulta, Target, Neiman Marcus and Nordstrom because they did not understand what it takes to move products from the shelf.”

Jump Accelerator has advised beauty brands such as Besame Cosmetics, Code of Harmony, Chella Beauty, Suntouched, JustUs Skincare, MadeMan Skincare and SBLA Beauty on retail strategy, fundraising, product-market fit and more. Beauty Independent spoke with Banota to get his take on how beauty brands should navigate common retail challenges, execute in-store marketing that moves the needle and understand delistings.

All potential costs should be factored in, including inventory, logistics, marketing, samples, chargebacks, compliance, etc. Some costs can be unpredictable like chargebacks, expired or damaged products, but these can be reduced with correct forecasting and planning. As a brand, your most significant area of control is sales and marketing support to ensure you achieve your end goal.

Next, you need to estimate a sales volume for the retail door and create scenarios for that volume. You can use software or resources like NPD or Circana to get data on new launches at retail stores for brands in specific categories at particular prices to get an estimate. If you have to be scrappier, you will have to use forecasting techniques like benchmarking.

Start with a sample of your previous stores’ sales over weeks and months from launch, and then factor in why there is a difference in sales amongst them: Does it have to do with location, competition, assortment, sales and marketing support or share of visibility on the shelf?

If you are launching at a chain of beauty stores and not all stores are the same size, you can group the new stores according to location and size, and forecast separately for each segment using one store as a sample. This will help you come up with different scenarios to arrive at your desired profitability.

Your profitability and the initial investment in sales and marketing will also depend on your repeat sales. Calculate when and what percent of your consumers start returning to buy more or the same products from the brand. You have to ascertain how quickly you can achieve profitability.

Finally, look at your cash flow to see if you can sustain the partnership until it turns profitable. For an emerging beauty brand, the funnel that starts from grabbing customer attention in store all the way to purchase should be as short as possible or directly proportional to the cashflow you have.

“Win the door” means that you are gaining substantial market share of the category your brand is in by gaining velocity at the shelf. This is aided by shopper marketing. Sixty percent of decision-making on a purchase happens within a store. You have to interrupt the shopper and gain their attention by better understanding their journey inside the store and how your target customer shops. This will take some experimentation and you’ll likely need to try different merchandising and marketing techniques and even different store locations. Every category is different.

While you can customize the assortment you offer at retail by location or market, never launch everything you have with a retailer. Always go with your hero products because, if you leave it to the buyer, they will pick based on whatever they feel fits a gap in their assortment. They don’t want to replace their hero product with yours.

Once you have an understanding of how you can move your sales, you can adapt that strategy for the next location and come up with a plan. Success is never an accident.

Depending on your trade marketing budget, you can start with awareness campaigns, and then sequentially over weeks move to education and sales promotions with attention-grabbing spots first. Or you can play down the funnel with education, sampling and demos for sales. If you are bootstrapped, sales reps can be expensive if you are in hundreds of doors.

With small beauty retailers, brands need to educate the store staff and provide samples. Custom display shelves are important, too, as is securing a prominent display space in the store. Displays and shelving that drive sampling and interaction with customers can be impactful, depending on the category. Utilize the retailer’s marketing collateral both online and offline, especially with launch announcements. The retailer will likely do this, but you need to ask for premium and consistent placement.

With bigger store chains, brands should consider participating in annual and seasonal in-store marketing promotions where they provide point-of-sale material and special offers. This will require dedicated sales reps, though. If you can provide a full year’s marketing plan to the buyer before launch, it has the highest chance of being fully executed. Post-launch, make sure to estimate the impact of sustained sales and marketing efforts and then revise projections.

However, if your brand is not growing at all within one month of launch, it will either get relegated to a low-impact section within the store or the buyer will likely ask for huge promotions. Sales traction needs to happen within one to three months or the brand risks being delisted.

Delistings usually happen at set periods, so the actual exit will usually happen once a year. However, the buyers will start sending out emails within a month of the launch with the threat of delisting or they will at least hint at how low the sales are and tell you by what factor they need to go up by. They want brands to put in the effort and money to move the stock. If they don’t get the response they want from the brand or the results they need, the worst-case scenario is they will put the whole brand on a huge sale to liquidate the inventory.

If your brand has flat month-on-month sales or little growth, you are still at the risk of delisting, but the buyer will likely still be interested in seeing how much the sales can be lifted with initiatives. So, the brand can plan some kind of intervention to boost sales. However, if sales do not trend upwards or above a certain minimum after three to six months, the brand will likely be delisted.

If your brand is growing month-on-month, you need to keep trending upward for the first year without fail. For the first two to three years of the retail partnership, your velocity should ideally crack the top 5% of the brands within your category. You can then plan yearly initiatives in the store with stronger negotiating power to get premium visibility, shelf space and support back from the store.