Non-working trade references all of the promotional set up fees & the dollars that do not get directly to the consumer, do not drive targeted distribution, and do not drive repeat purchases. Examples of Non-Working Trade are Off Invoice discounts or OIs to the distributor, Non-Targeted Slotting/Free Fills & placements, Administrative Fees and Short Coded Buy Downs.
Working Trade is your targeted retail partnership spending to drive growth & brand equity, and represents dollars reflected at the consumer level. Coupons, Scans, advertising & flyers, targeted demographic app & e-mail notifications, etc. In industry terms, any place your deal money is getting ‘passed on’ to the end consumer.
Short-term results can be somewhat difficult to measure, however retailer level case growth is a fair starting barometer. Longer-term Spending can be evaluated & measured by ROI, ‘cost per incremental case’, and some more granular customer profitability. You can also evaluate longer term key metrics by assessing consumption growth, reduced spending per case, and reduced advent of slotting fees.
Some of these measures may seem more ‘in the weeds’ for newer brands, VC & brands largely delivering DSD & D2C, however it is important to note that these are not exclusive to ‘big company’ approaches – companies under $10M address many of these unique areas when discussing working trade vs. non-working trade and developing their most effective promotional strategy.
Your brand is rich with history & likely has a fantastic founder story, but do consider that the data is also an important part of the background you don’t want to miss out on to see and be part of what comes next!