The importance of gaining distribution
While the previous blog shows the link between availability and success, this entry examines the impact of a change in availability. For almost 20,000 brands we examined the number of top ten retailers where the brand is available in both 2017 and 2020. We then compared how a change in availability impacts share.*
Does gaining/losing distribution matter? Yes!
60% of all brands that manage to get into more retailers gain share. This compares with 45% if the number of retailers selling the brand remains the same and 29% if the number of retailers declines. In other words: Growth odds double for brands that win distribution versus those that lose distribution.
Obviously, not all retailers are equally valuable. Brands getting listed (delisted) by the number one retailer in a market can expect a share gain (loss) of 0.7% (0.9%). Brands getting listed (delisted) by the number ten retailer in a market can expect a share gain (loss) of 0.3% (0.5%). **
And each retailer counts (see diagram). Winning more retailers increases the expected share gain, losing more retailers increases the expected share loss. On average, three more (fewer) retailers translate into about a 2% share change.
* This analysis does not take into account the timing of distribution changes (i.e. a change simply implies that sometime between 2017 and 2020 the brand becomes more/less available).
** This analysis ignores whether a brand wins (loses) listings in other retailers as well. (i.e. among the brands getting into the #1 retailer some may gain or lose listings in other retailers throughout the same period).
Scope: 17112 top ten brands, 32 countries, more than 80 categories