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In FMCG sales, a common phenomenon exists: products often get distributed and shelved quickly with the push of promotions, but after a period, they stagnate and get delisted from key accounts (KA). Many manufacturers are puzzled and have to increase promotions or implement secondary distribution, but often with little effect.

Why do products fail to sell after being shelved? Facing this dilemma, what should manufacturers, wholesalers, and retail stores do? The author will dissect this predicament from a practical perspective, hoping to offer some insights to industry peers.

Uncovering the Real Reasons Behind Product Stagnation

When facing the situation of products not selling or even being delisted, the first reaction of sales personnel is: "Our product lacks competitiveness in this store; we need to request policies and promotions from the company." The last resort is to offer special prices or direct discounts. However, the real deep-seated reasons for products not selling are often ignored.

  1. Inadequate Visual Merchandising at the Point of Sale. During a business trip to Nanjing in April, I found a certain beverage brand in a Suguo supermarket with products manufactured in August 2013. The display boxes had yellow stains. When asked, the sales promoter said they had new stock, but those were just for display. How would such product display and visual merchandising affect consumers? Would they buy? The consumer reaction is predictable.

  2. Impact of Competitor Promotions. In August, in several large supermarkets in Jinan, there was a "war of the dairy brands" with promotions like "you sing, I'll debut": Mengniu first launched "buy one get two free" (buy a case, get two bottles), and Yili quickly followed with "buy one get four free," leaving Mengniu and Guangming unable to respond. Junyao, as a regional brand, directly adopted "buy one case, get one case free," which was effective. If you don't run promotions, your product will be delisted or left to die.

  3. KA Profit Issues. Although the product is on the shelf, it doesn't mean the retailer is truly willing to sell it. When a new baijiu brand entered a large supermarket chain in Zhengzhou, the supermarket exploited the information asymmetry between the merchant and consumers, "treating the product like a drug," pricing a bottle of baijiu that cost 8 yuan at 62 yuan. The result was "few customers at the front," so whether the profit control for KA is reasonable is a key factor in whether the product sells well.

  4. Insufficient Incentives for Promoters. Even though products are on the shelf, the commissions for promoters vary by product.

Case: At a three-star hotel in Jinshui District, Zhengzhou, for research purposes, I deliberately asked the beverage promoter about liquor. When we mentioned needing Songhe baijiu, they said, "Sorry, it's out of stock these days. Sir, would you like to try Gujing? It tastes better than Songhe!" I said I was from the Songhe factory and only wanted Songhe Liangye. Finally, the promoter reluctantly brought the Songhe. This phenomenon is common in liquor terminal marketing: why say it's out of stock when it's clearly visible at the bar? Insufficient incentives for promoters—perhaps the commission or bottle-opening fee is lower than competitors—means that even if the product is in the store and on the shelf, the promoter's reluctance to push it prevents the final crucial step of the sale. This deserves corporate attention.

  1. Impact of Stockouts. "Stockouts are more ferocious than tigers!" This is most felt by frontline marketing personnel! Stockouts lead to the following:

  1. Consumers may think that out-of-stock products are not bestsellers. When shopping in supermarkets, we rarely find Coca-Cola or P&G products out of stock. Stockouts are first an irresponsibility to consumers, causing disappointment and aversion. Second, stockouts can give consumers the illusion that the company might be clearing inventory or discontinuing production.

  2. Stockouts affect the display and sales of KA store products. The result is that even though there's no inventory, the store must still allocate enough space for display, which inevitably affects the display and sales of other products. The merchant will consider whether to reposition or delist the product, let alone sell more in the future.

Solutions to Turn Slow-Moving Terminal Products into Bestsellers

Since the product is on the shelf, we've solved the shelf space problem. To achieve actual purchase, the key is to solve the consumer's mental space—that is, to seize the consumer's mind first. In fact, products are not on the shelf but in the consumer's heart. Regarding solving consumer purchase, here are my thoughts:

  1. Strengthen Brand Visual Communication to Solve the Problem of Consumers Willing to Buy. In a market with abundant goods and a buyer's market, consumers' purchase desire is extremely low. How to arouse consumers' desire and prompt purchase? Strengthening visual communication is key. Besides POP stickers and proper display placement, three points need special emphasis:

  1. Reasonable Product Placement. The most basic is to make it easy for consumers to find, then enhance visual appeal. In June, I passed by a supermarket in Wuhan and, out of professional habit, wanted to buy two cans of beer. After searching for a long time, I found them behind a cosmetics display. Would such placement make the product sell well? How can a product that consumers can't even find sell?

  2. Matching Product Structure. In KA stores, we often encounter consumers who want to buy a certain brand but, due to limited variety and lack of choice, reluctantly give up. To stimulate consumer purchase, the product structure display must be matched.

  3. Point-of-Sale Visual Merchandising. Too plain displays don't leave a deep impression and are no different from putting goods in storage. We should learn from Coca-Cola and Pepsi and make efforts in visual merchandising to arouse customers' purchase desire.

  1. Concentrate Resources on Single-Product Promotions. Promotions have three purposes: first, to attack competitors; second, to boost sales; third, to enhance brand loyalty. Our promotions must achieve these three tasks. If it's just about completing sales, any company can do that. While attacking competitors, we must also avoid "hurting ourselves." This requires strategy, implementing "concentrate resources, single-product promotions." When Jinxing Beer was developing the Nanjing terminal market, it had to consider brand reputation and quickly open the market. In March 2005, they used the Guowei competitor product and launched a "buy two get one free" activity, quickly breaking through the competitor's defense line. After completing its mission, Guowei gradually withdrew from the market. Jinxing's operation in Nanjing can be considered classic.

  2. Control Product Price Balance. Prices that are too high or too low affect brand communication and product sales. Wahaha has achieved the ultimate in controlling profit balance. Wahaha can distribute products to terminals in third- and fourth-tier markets and stabilize profits at all levels, leaving Coca-Cola and Pepsi helpless because their terminal management, supervision systems, and reward/punishment systems are strict, ensuring stable price systems and order, and providing reasonable and sustained profits for distributors at all levels.

  3. Strengthen Performance Assessment of Promoters. "People move people, but they don't move; benefits drive motivation." Strengthening performance assessment of promoters is key to achieving a leap in product sales. The assessment should emphasize the following:

  1. Set reasonable tasks for promoters.
  2. Increase the assessment weight on profitable products.
  3. Most importantly, establish a "loyalty award" for promoters who do not promote competitor products in KA stores, increasing their commissions and wages.
  1. Strengthen Process Control of Merchandising. Doing the process well is the basic guarantee for selling products. In product sales, the following work needs to be done:
  1. Strengthen communication with warehouse staff to prevent stockouts.
  2. Keep in frequent contact with merchandisers to do a good job of product merchandising.
  3. Pay attention to the timeliness of merchandising and the vividness of displays.
  1. Achieve Deep Communication Between Brand and Consumers. If we cannot achieve efficient communication between brand and consumers, the product's benefit points and brand culture cannot occupy consumers' minds, consumers' purchase desire cannot be fully stimulated, and consumers will not actively buy or repurchase. Therefore, terminal promotions and brand displays must be centered on consumer needs, achieving humanized, personalized, and vivid terminal promotions and brand communication.

The problem of what to do when products sit on shelves and don't sell has always troubled every marketing policy maker and executor, but few truly think deeply, and even fewer conduct in-depth market research. In fact, the real problems are discovered in the market. Every manufacturer can do promotions and price cuts, but the result is often "killing a thousand enemies at the cost of eight hundred of our own." The correct approach is to find the root cause and treat the "disease" accordingly.

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