Creating grocery awareness is a complex business, made even more so with people consuming media on their mobile phones while on the move and the decline of TV and print consumption.
In New Zealand & Australia, FMCG brands and stores have been using discount as their major promotional focus. http://www.nielsen.com/nz/en/insights/news/2018/the-470m-opportunity-changing-the-game-with-price-and-promotions.html?cid=socSprinklr-Nielsen New Zealand & Australia grocery shoppers are spoilt for choice when it comes discount purchase opportunities. Is this strategy working or just increasing costs? I think we can be more creative than just reducing price discounts.
In New Zealand & Australia, FMCG brands and stores have been using discount as their major promotional focus. http://www.nielsen.com/nz/en/insights/news/2018/the-470m-opportunity-changing-the-game-with-price-and-promotions.html?cid=socSprinklr-Nielsen New Zealand & Australia grocery shoppers are spoilt for choice when it comes discount purchase opportunities. Is this strategy working or just increasing costs? I think we can be more creative than just reducing price discounts.
Approximately one month ago I had a meeting with an Australian supermarket category manger. It was one of the longest meetings I have ever had with a buyer and certainly the most helpful. The manager explained his strategy and ideas on how value could be added to the category and afterwards over coffee we discussed some range and promotional ideas. What was interesting was the statistics from a deep cut promotion that had shoppers buying their total monthly requirements in one shopping trip killing the sales for the rest of the month. This action moved a significant number of shoppers to the value end of the category and as a result the whole category suffered until shoppers returned 3-4 weeks latter..
The challenge for category managers is to list products and inspire shoppers by offering compelling reasons to purchase products classified as “Good, Better, Best”. The trick is to employ strategies that give category managers and shoppers the reason to stock & purchase aspirational products within the same category based on different added benefits and grow the category.
It is unrealistic to to use TV, print and digital media to achieve awareness at an individual store level due to the variability in store listings. Online advertising has the added complication of not being able to validate the click’s like’s and impressions come from real people. There are reports that only a quarter of all digital ad spend reaches real people due to Bots masquerading as real people online. In recent months Twitter & Facebook have been removing hundreds of millions of user accounts that cannot be verified as real people.
What we do know is 5 million New Zealand shoppers visit supermarkets on a weekly basis. This number of shoppers per week presents a fantastic opportunity to raise a products awareness at an individual store level. With this number of shoppers we could be doing a lot more to inspire shoppers to buy.
Storetaste has created a “In Shop Sales Support & Reporting Platform” to reduce sales support costs while increasing the visibility of the results and the reps activity on the shop floor.
A brand that I have been privileged to work with has reduced their level of discounting by implementing a national sampling program sampling in 150 stores each month for over 2 years now. For 2017 more than 150,000 shoppers interacted with brand reps talking about the brand in their favourite store.
The outcome from this activity was the discount budget reduced by 4% as a percentage of sales and the sampling program cost only 1.5% of sales. At the same time both unit and dollar sales increased compared with the previous period.
The saving achieved from the reduced discounting activity is significant while still maintaining a very active awareness campaign in the stores the products are listed. And not wondering which 50% of your promotional budget is working!!
What we find interesting is the psychology of brands for different promotional activities. For discounting and media advertising brands are willing to amortise the cost of the promotional program over the financial year. As long as the cost is within budget then everyone is happy. However when it comes to sampling (arguably a lower cost more targeted promotion that is more effective at increasing sales) brands want to recover the cost of the activity on the day instead of monitoring awareness and the shoppers purchase response over time.
Author: John Smart is a sales and marketing specialist in the retail industry and founder of Storetaste.com. John has worked with well known brands in the fresh and grocery categories significantly increasing sales for FMCG brands in New Zealand and abroad.
The challenge for category managers is to list products and inspire shoppers by offering compelling reasons to purchase products classified as “Good, Better, Best”. The trick is to employ strategies that give category managers and shoppers the reason to stock & purchase aspirational products within the same category based on different added benefits and grow the category.
It is unrealistic to to use TV, print and digital media to achieve awareness at an individual store level due to the variability in store listings. Online advertising has the added complication of not being able to validate the click’s like’s and impressions come from real people. There are reports that only a quarter of all digital ad spend reaches real people due to Bots masquerading as real people online. In recent months Twitter & Facebook have been removing hundreds of millions of user accounts that cannot be verified as real people.
What we do know is 5 million New Zealand shoppers visit supermarkets on a weekly basis. This number of shoppers per week presents a fantastic opportunity to raise a products awareness at an individual store level. With this number of shoppers we could be doing a lot more to inspire shoppers to buy.
Storetaste has created a “In Shop Sales Support & Reporting Platform” to reduce sales support costs while increasing the visibility of the results and the reps activity on the shop floor.
A brand that I have been privileged to work with has reduced their level of discounting by implementing a national sampling program sampling in 150 stores each month for over 2 years now. For 2017 more than 150,000 shoppers interacted with brand reps talking about the brand in their favourite store.
The outcome from this activity was the discount budget reduced by 4% as a percentage of sales and the sampling program cost only 1.5% of sales. At the same time both unit and dollar sales increased compared with the previous period.
The saving achieved from the reduced discounting activity is significant while still maintaining a very active awareness campaign in the stores the products are listed. And not wondering which 50% of your promotional budget is working!!
What we find interesting is the psychology of brands for different promotional activities. For discounting and media advertising brands are willing to amortise the cost of the promotional program over the financial year. As long as the cost is within budget then everyone is happy. However when it comes to sampling (arguably a lower cost more targeted promotion that is more effective at increasing sales) brands want to recover the cost of the activity on the day instead of monitoring awareness and the shoppers purchase response over time.
Author: John Smart is a sales and marketing specialist in the retail industry and founder of Storetaste.com. John has worked with well known brands in the fresh and grocery categories significantly increasing sales for FMCG brands in New Zealand and abroad.
Founded in 2014 for FMCG Brands. Storetaste.com: Is a "In Shop Sales Support & Reporting Application” with a team of shared reps and a cloud based reporting platform based in New Zealand & Singapore. Providing visible & affordable in store merchandising and in store sampling services."