Shopper Marketing

Smarter is as smarter does

waitroseRetailers are often confused as to what constitutes a promotion. Basically, they are seriously fixated in simply giving money away.

So let’s here it for a retailer finally looking outside of the casket.

Waitrose said the launch of its ‘Pick Your Own Offers’ promotion has helped to drive sales, with total provisional divisional sales (excl fuel) for the week ending 20th June seeing a 2.3% increase on the previous year.

The scheme offers loyalty card holders 20% off ten products of their choosing, from a list of its most popular branded and own-brand products.

Waitrose marketing director Rupert Thomas said: “Among the most popular choices from the list of nearly one thousand lines are essential Waitrose bathroom tissues, Waitrose British blacktail free range eggs, Waitrose cherry vine tomatoes and essential Waitrose British chicken breast fillets.

People rushed into press to denigrate this approach. A letter in the Grocer this week opined;

The actual mechanic and required commitment will turn folks off. Waitrose shoppers won’t really care because they can get 20% off their toilet paper for the next 3 months…..

Most people entirely miss the point here. The older shopper is more into theatre – and this offer gives you theatre in spades. They are also more into reading, they grew up with it, something Millennials often find hard to understand.

With a shop of £50 you could save a tenner, and have fun deciding how you actually “spent” the discount.

There are two huge advantages to Waitrose in this flexible approach to running discounts;

The first is that they will get a behavioural economics view of what really matters to their shoppers. Shoppers could choose to reduce the cost of staples, but in the knowledge that they would not necessarily save an enormous amount per purchase. OR they can reduce the cost of those little luxuries that make life right – bringing them down to nearer the everyday price. Looking at the list above you could see a mix of strategies here.

The next step might be, of course, to pick a few of those that fit into the luxury category – and offer them direct via e-mail to people keen and eager to listen. As Waitrose don’t get all the insight that Tesco receive, this is really a no-brainer for them.

The second advantage is that this approach spreads the demand burden over 1000 lines and not just a handful. This makes it easier to manage by the supply chain who ofte3n struggle in Waitrose in particular.

It’s the sort of approach that shows Waitrose understand their shoppers better than the commentators do, and certainly better than Tesco the rest.
Win Win in my book

Why do you get up in the morning?

When 80% of what you do will fail

This is what we are told about your success chances for the next new product. There seems to be a comfort in applying the 80/20 rule to retail marketing even though it often flies in the face of the facts. But would you really get out of bed for a 20% chance of a good day?

Argumentum ad populum (Latin: an argument to the people) is the logical fallacy that if a lot of people believe something, then it must be true. Generations of politicians reach, and hold on to power by understanding that it’s not the facts that matter, it’s the beliefs. So lets look at the facts. 
In 2001 Schneider in conjunction with Boston University researched 91 significant companies – with revenues over $2.6 Billion about the recent performance of launches. The respondents reported that 58% of the products hit 8,9 or 10 on a scale that ranged from an overwhelming success to a dismal failure. The study called these Highly Successful launches.
What this means can be gauged from the fact that 71% of these reported that they had bettered forecasts. So if we were simply to take a simple, on forecast or better measure, you are looking at a very simple 41-50% success rate. They then went on to look further at the reported drivers for success. If you take out all of the planning and just focus on the Marketing they said;
  1. Focus on the consumer to improve success
  2. Gaining Shelf Presence and distribution are Key
  3. Spend money on products that are “new”

Interestingly they also said “Don’t put your CEO in charge of the launch!”

Would you get up in the morning for a 20% chance of having a good day? Now you don’t have to.

However, there are a myriad less important new products that companies launch as range extensions that they creep onto the shelves. They take up important shelf space from other variants that need it (certainly promotionally). They bleed time and attention from executives, and investment from the real successes.
You need to treat even range extensions as new products, and give them the attention they deserve to make sure they reach their targets and become an active part of your range – even if this means removing products that have failed.

The real price of failure is the products that get removed when you launch new ones. The ones that, quite possibly, were never given a chance in the first place as they were simply “drifted” on to the market.

Best to make sure, then, that your products are not amongst them.
There are 3 key hurdles you absolutely need to overcome, store and consumer.
They require coordinated sales and marketing action right down to store level. They all actually MAKE money.
 Almost no-one hits all the targets. Do you?
LaunchControl (1)
For your free book, and a chance to get a performance check on your product launches Click Here
PS Check out Chapter 4 and the Rumsfeld effect, Chapter 7 – In Place of Price and Chapter 8, The Long and Winding Road.

Building in Tesco – A view from the sharp end – and where to look for brand growth June 2015

The top section is an article by Brian Moore – editor of NAMNEWS, and expert on the category management process. It gives you an inside track on the very real difficulties that brands of all sizes face this year – and ongoing – in building a brand in all of the majors. He stresses the need to be sure that the investment Tesco will expect you to make will definitely work. When you have reviewed where sales negotiation can take you – you will find you need to look away from where you may be spending now, and look at investing in different, but guaranteed approaches. Which is what the second section gives you. 

Given that Tesco plans to reduce the negotiating elements of Back Margin from 24 to just three by 2017 (volume, prominent positioning, and compensation payments in the event of product recalls), it may be useful for NAMs to work this through in terms of the financial impact on their Tesco relationship, especially given the latest £6.4bn loss…

Essentially, it is probable that the total Tesco take from your brand will remain the same i.e. they are unlikely to surrender any income currently coming from Back Margin; a proportion of this will simply move into Front Margin. In other words, say the current 20% of trade price represented by trade investment will translate into 15% of ex VAT shelf price, assuming a 25% retail margin.

The issues for suppliers include:
– What will happen to shelf prices if Tesco want to drive sales really hard via an extra 15% price cut, using the ‘excess’ Back Margin?
– Will the resulting scale economies be sufficient to satisfy Tesco (i.e. their January price-cut test appeared to be profit-neutral, according to a Dave Lewis interview in The Grocer)?

In practice, given Tesco’s need for cash, it is probable that they will simply absorb the ‘freed-up’ Back Margin within the business, and finance price-cuts via current Front Margins. One of the remaining Back Margin elements – Volume Rebates – will hopefully be sufficient to help make the price-cuts profit neutral…

On balance, Tesco’s move from Back to Front Margin represents a quantum leap for suppliers in that their Front Margin income will be a direct result of sales made and all Back Margin will be sales-based and paid in arrears.

This is a major breakthrough in UK supplier-retailer relationships and should not be underestimated. However, we are now at a point where suppliers could lose control of some historical Back Margin monies.

Negotiating ownership and usage of Back Margin

Given that supplier investment in Back Margin was originally intended to stimulate sustainable sales of the brand and should always have been conditional, many suppliers will be reluctant to simply surrender the allocation and use of trade investment monies – other than the three permitted buckets – to a retail partner working to a different set of priorities.

This issue goes to the heart of fair-share partnerships in UK retail, whereas continental players have always had the protection of supplier-retailer contracts as a basis for establishing and maintaining the integrity of trade investment.
Moreover, as the surrender of any influence over the use of trade investment by the supplier could result in elimination of any discussion re KPIs and compliance conditions in monitoring retailer performance, even the effectiveness of the three permitted buckets could be compromised. This could possibly result in either additional transfers to Front Margin, or even delisting in extreme cases of poor performance.

It is therefore imperative that suppliers and Tesco find ways of jointly optimising the discretionary use of trade investment budgets by the two partners.

In other words, assuming that the three permitted Back Margin buckets account for half of a supplier’s 20% trade investment in Tesco, this leaves the ownership/control of the remaining 10% subject to further negotiation….

In order to convince Tesco of the bona fides of such trade investment retention, a supplier has to be able to guarantee that the monies are fully allocated to the development of supplier’s business with Tesco. The funds will need to be invested in initiatives that drive traffic to the retailer’s stores, where incremental sales of the supplier’s brands will reward Tesco via a combination of Front Margin and Volume Rebates.

It is unlikely that a retailer in Tesco’s current condition would agree to anything less…

What does this mean for a company needing sustainable growth?

One thing should be clear to companies wanting growth. The Tesco promoted ways of getting them are designed more to stimulate revenue into Tesco centrally than they are through the tills. This rules out anything that does not give you guaranteed space and product on the floor (dunnhumby coupons etc). However, there  

However there are well proven techniques that RVS have checked delivering very positive ROI and barnd growth for you and your partner retailers Case Studies

Incidentally, it is also unlikely that these seismic shifts will be confined to supplier-Tesco relationships, in that if successful, other retailers will be placed at a competitive disadvantage unless they follow suit… So, getting it right with Tesco should provide a useful template for the rest of the trade.
By the way, whilst the current Tesco team are obviously focused on a clear path forward, it might be wise for suppliers to hold back some funds in case a change of Tesco management at some stage concludes that your category’s in-store presence needs a little ‘livening-up’ via an additional injection of trade investment…


The two speed convenience market

Taken as a whole, the convenience market is in very rude health…

Him! tracking research revealed that the average spend in this channel increase from £6.05 last year to £6.52 this year against a background of price stability, combined with an average of products purchased that has hit 3 for the first time in 10 years.UK convenience market

Some store groups are really committed to expansion – The Coop has pledged to open 100 in 2015 despite its torrid recent financial past. M&S(38.1%), Sainsbury Local(14.9%) and Little Waitrose(13.3%) as the upmarket offerings all growing by over 10%.

But there are exceptions

However Tesco and Morrison are exceptions, with Tesco, the largest chain at 2,347 seeming to be peaking, as it has announce the closure of 43 underperforming Expresses. This despite also announcing that the two Golden Children were online and Express at the end of last year.

Morrison admitted they were “not seeing the level of performance”

Meanwhile Musgrave have sold out their loss making UK convenience brands, Budgen and Londis.

What is associated with success?


Food Doctor in a non ranged Tesco heavily shopped in early afternoon

Him! note that c-store shoppers are buying more on promotion – but still not as many as in the supermarkets – only 20% of the basket. However, the increase in basket size shows that people are looking at more areas than ever before. The increase seems to be due to a percentage of shoppers buying over 5 units, rather than a wholesale move up. The number of shoppers buying just one item has moved not at all with an average of 30%.

However, the number of people buying on impulse is up to 20% from just 17% in 2014, and 6% in 2000.

It’s Promotions Jim, but not as we know it…

When you set up a convenience store it’s all about location, location, location.

It’s exactly the same inside the store. Retailers need to know what products their customers would like, and then make it really easy for them to be seen. We carried out research with a major confectionery company, and this showed that the further away you were from line of site at the till, the less effective your POP display was. On the other hand, POP on the way in, and in particular, outside the store was effective.

Path to purchase also works well here. Him! also reported that one in 5 shoppers received leaflets from their local retailers, and a massive 62% of them said they encourage them to visit the stores.

You would think, if you listened to all the commentators, that it was all about price. To an extent, it is, however, 37% of people bought an unintended item, the remainder switched between product or brand.

Key locations for convenience stores are the checkout queue, the path to purchase for signage and home based
couponing. Getting people to move outside this can be very challenging.  Here you might think that a standard MGMO freears display layout is just what you need. However, times are changing and more and more city centre people are into Healthy Eating. This is a phenomenon we call Urban Health.

Increasingly for lunch people are choosing healthier snacks that don’t give them the sugar rush. The picture heading this article is of a heavily shopped checkout fixture for Food Doctor, one of our clients. The snack bars at the top are down to a token few, and most of the full bay has been very heavily shopped. However, this store was not ranged by Tesco for this product. With confectionery purchases according to Him! in a rapid downward spiral (27% to 19%) this should be a wakeup call for convenience stores to look outside of the main sugar brands to healthy alternatives. This is a huge growth area that is under-recognised at the moment on the High Street. RVS are working with a number of brands challenging the unhealthy in an area that is great for store PR and sales equally.

It’s not all about Price

RamadanMost c-stores have absolutely no idea what sales they expect to get from a promotion. However, if you, as I do, move from store to store you rapidly get the picture that promotion prices empty shelves. Given that 37% of people added a product to the basket because of a discount, it makes sense to over face special offers dramatically from day 1. The promotion space is the most important that stores have, and it should face the shopper as dramatically as possible. This is a Ramadan end for a local Tesco store facing the entrance. Light on Ramadan messaging, but very heavy indeed on what matters to Ramadan shoppers.

Increasingly, too, companies are realising the benefits of stopping shoppers with non-price initiatives. Branding is becoming really important to c-stores. Coupons are one way that brands and retailers can work together by offering the opportunity to bring people in.

Other ways would be to link sales of destination product through to other product. This is something that, as an example, WH Smiths do when they offer you product at a discount with every purchase.

Great idea, that would be even better if the two together were tied at the shelf (buy this, and this and get a discount or your money back).

Display, as well, is paramount, in building high visibility product. RVS identify core shopper needs in areas, and these should be to the front of any offering. Since shopper in convenience do act on autopilot it is vital to ensure that any messaging is as “in their face as possible”.

Core2Store have trialled various approaches to build that additional sale when you know there is a real compatibility between two products.

Position your core products right at the front (but do make sure you understand what they are first!)

Position POP around them

Position bags (or cartons or cans) of stock so they can’t miss the message, and can’t avoid buying


Bring them in with a message in mind

Move your two speed shoppers up a gear by spending time understanding them







Profit from change before change removes your profits – the Sales Challenge

The UK retail environment is currently undergoing violent change. This is in part driven by a change in attitude and circumstances of the shoppers – but also by a lack of response of the key retailers to this change.

This blog is about how you can turn the current position to your advantage.

Cull your range – and improve your sales at the same time

Tesco are already planning to remove products they don’t feel are worth their space on the shelf. To be fair there is a very long tail of low performing products clogging the shelves, and using space that could be better utilised as flexible space for offers or as additional fixed space for the best performers  makes absolute sense. Shoppers have really complained in the past about Tesco availability – in particular during promotions. So full marks for picking this up.

Tesco/Sainsbury/Asda have a tail. But so do you. The knee jerk reflex in the past has always been to build range to gain additional sales. This will be much less of an option in the future unless you can make a very strong case – and back this case up with more money. Make no mistake, all the retailers will increase the listing cost for new products to reflect the higher value they now place on every foot of shelf. Profit Matrix 1

The RVS profit matrix chart gives you exactly what you need to understand how the retailers, and your shoppers, see your products. The green blobs are products that do better than your shelf average return. The Y (left) axis, shows the return you get from space overall. While the X axis shows how well they do in smaller stores. The size of the blob indicates the number of stores the product is in.

This chart offers some really obvious opportunities, to go with the space return issues. Simply trade places on the shelves with your poor performers to meet both of your objectives. Promote change NOW before the change is implemented for you.

Make sure new products get on their feet immediately

shelf adder and stickerIt is quite usual for new products to go on the shelf with a discount. However, anyone familiar with the profile of promotion performance will be fully aware that this is just like a Chinese meal. A few hours later you need another one.

However, if you spend a little more you can get seriously better results. Retailers tend to treat all of their customers as a homogeneous mass. You,. however, don’t have to.  The “Try me free” stickers are very powerful in recruiting new people who will come back. Of real interest to you is that you can get the same uplift as an 80p drop in price for a reward cost of less than 1p. The stickers link directly to our yousay site which rewards the purchaser and gives you instant feedback. Meanwhile the Shelf Adder®” on the front is absolutely ideal as an alternative to the shelf strip in the channel. Apart from anything else, you can actually see something, as opposed to price labels! However, it is also there to hold your space and let the night shift know what should be in place.

Close to the product (Layer 1 investment) is the most powerful way you can spend to build loyalty and instigate change. You still need discounts for volume BUT you need growth above all.

Horses for Courses

shutterstock_219381586Every product has stores in areas where more people than the average seek to buy. People of like mind tend to live together, their children go to the same schools, and they shop in the same range of stores. In short, we tend to behave just like our friends. So when we visit our local store, the average shelf space will be wrong when the product filling it is in more demand than the average.

Build your Core

If you can identify these core stores, (RVS Pulse provides you with a complete list of each of these) then you can invest a little more with larger shelf adders geared to giving you a little more space. These can be placed after discussion with store management.. It is typical for companies – if they focus at all – to choose just the large stores. Actually, if they are not core, they usually have more than enough stock cover and space to manage standard demand. So whatever the size of the store, it it is core, work with it.

Some managers may look at the figures and say “lets work with the poor performers and bring them up to speed”. Wrong. Poor performers have many fewer of your target market passing the shelf. Catching their eye will get you a muup[lift from promotionsch smaller reward than working with your core, if indeed you manage to convert anyone at all. If you are in Sales, ask your Marketing colleague why they target their money at specific high potential and not at low potential areas. It’s the same calculation.

Store managers in your core are important. Build sales by investing behind them, and they look like superstars to their area management. Core2Store have developed a full range of shopper targeted techniques that offer you guaranteed store based growth based on PULSE data that you, and the managers you talk to, can depend on. And make sure these core stores understand that they need to allocate much more space as soon as you go on promotion. The uplift they will give you makes them vital for your sales, and for your core shopper happiness (see the next section). Whatever you do though, do not rely on field calls to give you this rapport. Field teams, no matter how good they may be always have variable quality in front of your managers. Talk to Core2Store about how they received this accolade without any field team usage at all;

I have been at a Local Sourcing Conference today where we received an award for ‘Understanding the Tesco Strategy, Category Strategy and Local requirements’ and ‘Working 24/7 to drive growth’.
This is a really positive acknowledgment from the Tesco Local team and its thanks to all the hard work you put in that is helping our business move forward in Tesco.

Check your Stock

Those amongst us with long memories will understand the concept of stock pressure! Managers will always seek to get rid of stock hanging around in the back. The problem for them, and for you, is the way that retailers manage stock at the moment, leaves too little in any of your core stores normally (out of stock at key demand periods) and in particular when you are on promotion.

There is a direct relationship between stock promotion upliftthe stock cover you have in a store, and the uplift possible when demand increases.

This may be organic (such as at weekends) or artificial, such as promotionally via price, couponing or advertising.

Store support needs to be proportionate to shopper demand, and not store size if you want to get sustainable growth from satisfied shoppers.

Raise your sights by looking at more stores

It is becoming increasingly important to give stores and their shoppers what they need, rather than what they say they want. Central systems have lead to local problems. Moreover, the habit of retailers to allocate products to convenience retailers simply on the basis that it sold well in large stores is perverse. We have brands where they only sell in smaller stores simply because they appeal to the impulse purchaser. It will surprise many Sales Directors, I am sure, but the 2,500 Tesco Express stores have the potential to sell a third, or better, than the sales in the larger stores – in particular in core areas. If you have the right product then, that’s equivalent to 800 large stores. That’s bigger than all Tesco Extra and Supermarkets put together. And, of course, convenience stores are growing. Not just vs their larger competitors, but organically. Have a look at this;

him! has just interviewed 20,000 shoppers, across 20 leading convenience chains, as part of its Convenience Tracking Programme (CTP) and found 18% of them admitted to picking up something on impulse vs just 15% in 2014 and 14% in 2013.

“Interrupting shopping behaviour in a convenience store is no easy task; 3-in-4 shoppers want to get in and out as quickly as possible and 42% don’t notice any comms or signage in-store. But retailers and suppliers have been putting a real focus on ‘interrupting and inspiring’ their shoppers in-store in order to disrupt this shopper often on auto-pilot,” suggested Katie Littler, Communications Director at him!

The number one driver of impulse purchasing is promotions, according to shoppers. “But it’s not just the cost saving which tempts shoppers,” explained Littler. “The focus and visibility given to promotional products help the get noticed by shoppers.”

The other area which is driving impulse purchasing is the till and queue area. 1-in-10 impulse shoppers pick up the product from this area of store, according to the 2015 CTP research.

The way to get into the smaller stores is to prove how well you can do there. Seem impossible? Not so.

Commit to Change

Many companies are keen to do more of what they already do, but negotiate the price down. You need to ask yourself if what you are doing at the moment is actually taking you where you need to go. If it isn’t or you don’t know, this is a Green Shield moment for you.

Back in the day, Green Shield stamps were offered everywhere – but the biggest giver by far was Tesco. It was commonly felt that it would be suicide to pull out. This is the Wikipedia comment

In 1977 Tesco launched Operation Checkout, price-cutting aimed at countering the new discounters such as Kwik Save. A decision was made to abandon Green Shield stamps, saving £20m a year and helping to finance price reductions.

Recognise the scenario, and want to bet against dunnhumby being bought out? Nothing wrong with the Club Card, except when you call it a loyalty card. It’s not. And if you can’t target your competitors, it has no value for you either. Remember, a pack based promotion does target your competitors. Shoppers who are lapsed users became so for a reason. There is a direct relationship between more purchasers and more loyalists. Target always getting more purchasers and you get the loyalists as a bonus.

Thing is, if you invest to your core, and you know where it is, you can measure the impact via the sales data you get for free from all the majors. If you don’t see the impact, you aren’t getting any. If you don’t measure, you can’t do better.

“If you don’t know where you’re going, any road’ll take you there”

This quote loosely from Alice in Wonderland should be placed on the wall. The data exists (and PULSE from RVS makes it readily available) to understand where you are, and plot a measured course ahead.

This can then be shared with retailers at all levels, as well as within the company so that all activity is directed, supports, and is measured together.

Keep your fingers on the PULSE of your business


Have any of the Big 4 retailers really got the picture?

ASDA join the Naughty Step

Asda yesterday posted a 3.9% fall in like-for-like sales for its first quarter period to 19 April, making it the worst performer amongst the big four supermarkets and highlighting the tough trading conditions. However, Asda’s Chief Executive Andy Clarke struck a defiant note after what he described as an “unprecedented” quarter with his chain “in a period of expected turbulence, not distress” and stressing it “remains a balanced, healthy sustainable business” that is committed to its five-year plan.Asda

Asda’s third consecutive quarterly sales drop was its worse trading figure since the 1990s with the rise of the discounters, food price deflation and tactics of its rivals to shore up their own positions all contributing to the poor figures. Asda’s decline compares with a fall of 2.9% at Morrisons and a 1.9% drop at Sainsbury’s over similar periods, whilst Tesco’s sales were down 1% in the three months to 28 February.

Clarke reiterated his commitment to the company’s strategy but said 2015 was proving to be the most challenging year yet for traditional supermarkets. He commented: “This last quarter has been unprecedented. We have seen deflation in the market and exponential shifts in the industry. Although I still believe that 18 months ago we did a great job of predicting changes, we could not have foreseen what’s happened to others and the moves they have had to make in order to restore their business – creating an impact on us in the short-term.

But “Whilst I take no pride in reporting a negative number, we are in a period of expected turbulence, not distress. We won’t buy short term sales at the expense of long term profitability.”

He added that customers were not yet cash-confident, preferring to save rather than spend and said that Asda’s strategy to maintain a price gap with its three main supermarket competitors, while narrowing the gap to the discounters was working. He pointed to market share gains in areas such as dairy and meat where it has made significant prices cuts. “Strategically we’re absolutely on plan, continuing to invest in price is working,” he said.

Echoing recent comments from Sainsbury’s Chief Executive Mike Coupe, Clarke said he expected prices to continue to fall across the grocery market for at least the rest of this year and potentially into next year. Asda was the first of the major supermarkets to respond to the threat of the discounters, pledging back in 2013 to spend £1bn on price cuts over five years and has since admitted it may have to spend more than that.

Is his analysis right?

It is interesting that he feels, at a time of effective price deflation, customers prefer to “save rather than spend”. This contradicts research just out from GfK for April 2015 that reported their Consumer Confidence Index remained at 13-year high in April. Presumably, therefore, Clarke knows something that we don’t.

Retail Vital Statistics is in daily touch with what is actually happening down at store level. In terms of the relationship between the Groups and the shoppers, the local store manager is being taken almost wholly out of the loop. Retailers are falling back on their systems. Yes, that’s right, the systems that accompany them into the position they are in at the moment.

Central decisions taken by retailers tend to be based on outdated information, and do not adequately reflect local conditions. I dislike the process that politicians tend to use – policy making based on single illustration. However, these do actually make the general point;

  • We managed a category for a major drinks brand making sure that it kept to the central planogram. The expectation was that sales would go up – in fact they went down. The shelf had been flexed locally to better reflect demand, and the central diktat was wrong for that store.
  • We worked with the industry leading kitchen towel company to replenish shelf spaces to see what needed more space. It was actually the own brand – by some significant extent – and it did make for more category sales. However the results never made it to the buyer
  • The leading brand of cheese that thought it would be a good idea to block face all of their brand together. This failed to understand that people shopped for cheese variety first, and only then for brand. The savvy managers had nothing to do with it. The remainder saw sales fall.
  • The leading regional crisp brand that was the category leader in it’s heartland that had major space increases in Asda stores to be able to cope with demand. Central diktat at the beginning of the year was that the planogram is fine and you must not, in store, under any circumstances, deviate from it. Result, promotions falling short of forecast.
  • Woolworth had the most rigid central plan of all. Set a few years before they allocated for Christmas, the time they made all of their profit, the same every year, to the same stores. It did not matter that an attractive competitor might have opened up next door. They also had a rule that said, if you run out of stock you leave a space on the fixture, and they allocated ALL the Christmas stock to store, leaving none as flexible backup. The result? The year they went bankrupt they had their most successful Christmas ever simply based on the stock that they had left from the many years of poor allocations.

What do these examples have in common?

Retailers believing that their central decisions are all-knowing will, ultimately, fail. As times change the knowledge is gained at store level. You don’t acquire this knowledge by spending a day a month in a store. You need to be able to see and relate to the shoppers. To walk round and see the empty holes and make a flexible decision to manage them locally.

This is exacerbated as the UK is actually overshopped. Something has to give.

ASDA have removed that space flexibility from their managers, Tesco have seriously curtailed it, Sainsbury never had it in the first place.

You may say to me, aaah well Morrisons order pad system is exactly what you would recommend. Actually, I wouldn’t. You need a robust system to manage the bulk of what you do leaving individual initiative to deliver obvious benefit. The Morrisons manager simply has too much to do.

Against a stripped down offering that the discounters deliver, the majors will need to enhance their service offering in their major stores. Retailers invariably say that if a shopper can’t find what they want, there is bags of choice down the facing.

Yes, and there is also bags of choice outside. Retailers do not only have to worry about getting people in to buy, they also have to worry about what they take away. The discounters are building more stores than the majors, competing right into their heartlands.

Retailers need local flexing, often this is product that they have never tried before. The RVS system identifies products a store should stock simply because they sell well in stores with a similar profile. This means, of course, you really need to know your shoppers, and your stores. And you need to be clear sighted about the role of your brands.

If people want own brands they can get them in spades from the discounters. So creating points of difference means focusing more on a brand offering. Talk to retail managers and they are ultra keen to try something new, provided they are convinced it will work. It’s the only way they can stand apart from all the other local managers. So bottom up trial really works for brands, and retailers need to keep this option open. A test market for good managers and brands at the same time.

You won’t get this from overusing the same systems you overused before.

albert-einstein-401491_1280Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein

Invest in Layers for Maximum Return on Investment

You need Growth BUT you also need ROI…

Best ROI across 15 years  of IPA award winners came from 3 stacked messages on the Path to Purchase (See Page 69  Beyond Shopper Marketing or refer Shoppernomics).9781472424853


1.Accelerate growth by gaining additional stores, facings and ranging

2.Accelerate growth by building shopper/consumer awareness and standout all the way to the pack

The closer you invest to the shelf and the store the closer the relationship to sales, the greater the immediate ROI and the easiest to measure. The further you get away from the pack, the more people you can reach, but the less direct the impact on sales. Obviously stage 1 before you embark on any other support is to check PULSE Profit to make sure you are getting all the sales you should be from your negotiated space, identify where your core is, and build as much store space, stock and ranging as possible. You would be surprised how much additional support simple actions taken here will pay for.

(The internet is also close to the shelf for on line purchases and increasingly used for in store purchases)

Layer 1 – Pack and Shelf Based Advertising

Affinity on pack sticker

On Pack delivers up to 40% Sales uplift and appeals more to potential loyalists than discounts

Shelf Adder2

Shelf adders scream out at people if the shelf is not full – they typically add 5% to sales

Closest to the pack is the pack itself – this needs to shout pick me up against the other packs around. So use NEW if you can. If not deliver other benefits. A send away price offer on pack can deliver the same impact as a 60p drop in price – for significantly less than 1p per pack. It’s your pack, and what it says is wholly under your control. Don’t waste the opportunity.

Shelf based signage makes sure that your space is only filled with your product – this is a huge issue in the UK where space is negotiated but not guaranteed. This placement can often be achieved by simple discussion with store managers. You need to be sure, though, that material can be easily removed if shelf locations change.

We have developed a type of sign not typically used  centrally-the shelf adder – that is very acceptable to the store. This could easily incorporate a QR code giving access to review sites, or the advertisement. Holding space – and keeping it filled is your number one priority. This is vital in you core areas. KOS redemption siteCore areas are those where more of your shoppers buy than the average. The shelves run out sooner and all your marketing effort will give you better return – but only if you make sure you get better supply there. And yes, it is entirely possible to focus sales, supply chain, and marketing effort on specific stores. While QR codes are touted as having a relatively small usage at the moment, our smartphone usagerecent research with the Retail Bulletin revealed that 40% of what will by 2017 be over 40 million people are currently using it. So the most powerful way to add value in a small space available to you.  Interestingly, while it is always felt that all people are interested in is price, this is far from the truth. Sure, price comparison web sites are important, but reviews are growing in importance almost as fast.

Lastly off shelf display is typically by central negotiation. In the most stores, however, these can also be negotiated at store level. So absolutely no excuse.

Layer 2 – Path to Purchase near the store.

This is vital for building sales and awareness where you have localised distribution or in your core areas. There are many types of local support such as local internet, outdoor, sampling, leaflets, coupons of various types. RVS have measured the impact of most channels.

Burns Petfood Sainsburys proximity 6-sheet

This layer can be structured so you have impact on the Head Office, the store and the shopper. Buyers are comfortable to give you more if you demonstrate (and they can see) you will be investing alongside them.

The most effective short term use of posters is close to store, and in conjunction with specific in store activity. There are a number of studies we have done, this is the most recent;

Although the primary objective of the 6 sheet posters was to introduce the NPD lines, it also increased awareness of the brand name in general which in turn increased the average sales of all the brands products in these stores

Poster results

Without stripping away the other forms of activity, the 6 sheets looked to generate around £60k in added value sales.

This level can give real interaction with the brand – as an example a link to a site with the commercial on, or to a competition. This can be achieved through the use of a QR code – and this can be augmented with a direct click through link (try it and see). This links to a current promotion in store redeemed through our research/reward site yousay. QR codes have a much higher penetration to the under 35’s.

The graph shows the difference between control and poster stores. The content was in support of NPD and a promotion in the store BUT the impact was seen on all associated products

Layer 3 – National media.

Here you can have a national reach if the market is right with social media, or through smartphones. We have conducted extensive research into the value of smartphones you can access here. The value of interactive content to the 43 million people who will own them by 2017 cannot be underestimated. Click here for our industry white paper with the Retail Bulletin > showrooming in stores

However, National TV in local areas can be purchased within a budget of £20-40,000. If content Burns pet food 48 sheetalready exists this “National Equivalent” can be very effective in giving a national profile to buyers, for a young brand. With more limited distribution it is important to tell people where exactly they can buy the product – view this.

Posters can, in their own right, also deliver national impact. As with this 48 sheet poster as part of the pet food campaign alongside small format posters above.

Balanced marketing is a mix between the three areas – you need to remind people on their Path to Purchase to get their full attention. However you must keep all three layers in place, and in proportion as you grow to get the benefit.

Spending on digital advertising is expected to comprise more than half of total advertising expenditure in the UK this year. However, while there are clear opportunities to drive brand engagement in stores with the huge number of smartphones, it is still important to remember line of sight whenever, and wherever, this can be leveraged.

Where Should you direct your investment for ROI today?

Every brand has a core user base. The type of people that want to hear what you have to say. These people tend to cluster together, and to shop in the same stores. Waitrose core shoppers enjoy house price rises where a new one opens up – it’s that important to them. You need to identify who your core customer is, and where in the country they cluster together the most. Investment there will get you the greatest return. List in new outlets to make their managers and shoppers happy. Combine the two actions for guaranteed short, and long term, growth.

The latest census, that we use, is the most insightful yet. Combined with store by store sales data you can identify your strengths, and measure the return from your carefully targeted activity.

You will hear people tell you the contrary – you should work hardest where you are weakest. However, you are weak there for a reason. If you spend your budget talking to people who are not that interested in hearing, you will need to invest much more to convert them. Wait until you can afford national advertising to build here. There is a direct relationship between the more people who buy your product, and the more loyalists you have. Build first where it is easiest – and don’t just relay on discounts to do this. See why here

Refine your Message

If you want to deliver impact AND ROI it is vital you understand the media to use, and the kind of message that appeals to your target market. Here RVS is working with the British Population survey and redemption data from the largest handling houses in the UK in an initiative we call PULSE Promotion. Not only can we tell you where your core customers live, but we can also tell you which media they are most in touch with, and the appeal they are most likely to respond to.

The IPA say that “Advertising and Promotions are a match made in Heaven” based on analysis they carried out of the most successful campaigns since their records began. This, naturally, agrees with the principle of not letting one channel carry the load on its own.

We identify 3 major groups of people – in terms of their general response to appeals – broken into 20 UK subcategories of people. The largest two sections we call face to face and face to screen. There is a huge divide between them. The former keep their friends close, they prefer to talk to them, and have little interaction on social media. However, they can be extensive users of the commercial internet. The latter use all aspects of the internet heavily, but they are still a small proportion of the UK population. There are a crossover group that use ALL appeals heavily.

If you know who you are talking to, you will get cut through. Click for Case Studies

Don’t just target consumer impact – target shopper sales

Learning from the UK’s Leading Brands May ’15

Kantar Worldpanel’s Brand Footprint Ranking reveals the strength of brands in 35 countries around the world, across the food, beverage, health and beauty and homecare sectors.  It uses an insightful metric called Consumer Reach Points which measures how many households around the world are buying a brand (its penetration) and how often (the number of times shoppers acquire the brand).

The Leading UK Brands are Home Grown

Kantar consumer reach

Within the UK the leading brand list is headed by Warburtons. In the worldwide Brand Footprint ranking, first place is held by drinks giant Coca-Cola. However, the success of domestic brands means it is the only brand in the global top 10 to make it into the British equivalent, where it sits in ninth place.

While the top 10 UK ranking is made up exclusively of food and drink brands, the global ranking tells a different story. Compiled using data from 35 countries, the global top 10 includes a more diverse range of FMCG brands, from health and beauty favourites such as Colgate and Dove to household and hygiene products.

There are two things that are striking about this list. The first is that there is a close, direct relationship between the household penetration and the frequency of purchase.

Penetration and Frequency Relationship

Penetration and Frequency Relationship

This relationship is inherent within Ehrenburgs Double Jeopardy Law.

Lower market share brands in a market have both far fewer buyers in a time period and also lower brand loyalty.

This is normally interpreted as the fact that loyalty is a statistical offshoot from penetration and not an entity that you can, or should target.

Allied to this is the realisation that actually, given there are 365 days in the average year, how little products are actually bought. So while it might be attractive to worry about why people don’t actually buy more, you are going to get much better value for money by getting more of them to buy. Simply focus on getting your offering right so you don’t lose them.

What does this all mean for the average brand?

Firstly that local brands can do really well by focusing on a local message, and making sure that it gets out to the shopper.

Secondly, your penetration – and the loyalty of your shoppers – will be linked to your availability;

  1. the stores you are in and whether the shelves are kept full when people want to buy
  2. your placement on the shelves, and the relationship between your local demand and the shelf space available to satisfy it
  3. the standout values of your pack in stopping and converting the shopper

The discounters cannot be ignored by all of these big brands since for some people they are the only store they visit. Similarly they can now be the basis for getting your brand in front of the young family, and building a loyal user base (more people buying) to take to other retailers as you grow.

Lastly, as you grow it is from the facing outwards in Layers. This drives how, and where, you invest to get the attention of your core shopper.

Layer 1 Point of Purchase – Focus on pack messaging and promotions primarily – and keep this effort going, as it gives you pack standout wherever the shelf is. As you can afford more;

Layer 2 The Path to Purchase – Move onwards to local messaging in your core areas. Posters outside the store. Local sampling. But ally this to gaining greater availability in the area (more stores and facings)

Layer 3 – The Greater Good – There will come a point where you can look to national awareness and the goal of getting onto the top 10 list yourself.

However, while you are reaping the fruits of all of the labours, never forget that you need to keep re-inventing this process since brands just like yours was, are waiting for you to slip up.

Why not download our guide to what actually does work in the first two layers above from here Case Studies



Shopper Management = Category Management evolved

It is a shame that people don’t behave in ways that systems would like them to. But they don’t. It is also a shame that systems developed back in the day when things were simpler, are not always fit for purpose when times change. But they aren’t. The typical ranging, developed in the era of large store dominance, went something like this;

1. We’ll try the product in our largest stores AND THEN

2. If the product performs well we’ll move it down to our smaller ones

3. And so on

In the days when the smallest stores were owned by other people than the majors this worked well. As time moved on people stopped shopping in many of the small stores – and moved into shopping in the big ones.  At that time I was involved in many conversations which went “How on earth are we going to get trial of our convenience offerings when there are no convenience stores around”.

This was a very good question. Many grocery brands have been built on trial in other shopper channels. Walkers in the independents are a good example. Growing from Leicester through the Midlands, to the North in chunks, taking out Golden Wonder as they went. J2O first started in the on trade, and moved into the multiples when they had achieved all they could there. Other brands rolled out from doorstep delivery including Frijj flavoured milk. I still very vaguely remember Corona dedicated doorstep deliveries. Local people to people experience is great for getting early trial where serried ranks of product on artificial category shelves lacks cut through.

Roots of Loyalty

Roots of Loyalty

Let’s move on 10 years. Here growth is coming from small scale again or even – in the case of dotcom – one to one. So people can build their own “shopper category”. In fact all the main retailers already build a shopping basket for you. However, ranging into small stores by the majors still tends to be decided in exactly the same way as above.

Meanwhile people, accustomed to a smoothed path to what they want, have turned to retailers expert at managing great value short range product – the discounters. You know what you get, and it is main shop volumes but with shorter ranges.

Convenience stores, where, as an example, dunnhumby data is seriously lacking (low club card usage) suffer accordingly.

You have to ask yourself why club card data is lacking here. I have not heard that this is something Tesco have looked at. But here’s a stab in the dark. Club card carriers in the family don’t shop in convenience stores.- but other members of the family might.

The Shopper Marketers Dilemma

When you are involved in shopper marketing you know that the shopper has missions. You absolutely know that if you make these missions easier they will buy more, and like you better. That is, though, not the ethos of the large store. The large store wants to keep you there so you buy more. They want you to browse the aisle, not run down it.

Category people think in big store terms, they see shopping as top down layered systems that need to be maintained. Shopper marketing people think in terms that fly in the face of some of these approaches. They think about making a mission easier to manage so additional time spent is because people are shopping, not simply confused.

This is the dilemma. Retailers and Sales teams are wedded to maintaining the big store system. This has no room for regional differences. Until recently the Coop, proud supporter of Fairtrade and locally sourced produce dictated that there would be no local ranging of any description. I gather the impetus for this was the lucrative central contracts with the major brands signing up to interesting overriders. Something of a volte face for a brand built on the back of individual local societies.

I spoke to the marketing side of another major convenience chain and I was told that, under no circumstances to raise the issue of local ranging.

However, local ranging is important to people, and this often cuts right across the way that top down works, driving from the “bottom up”.  Just like in the “old” days.

This is where different shopping missions offers the chance for the convenience store, whether independent or multiple, to respond best to local needs which have nothing to do with categories, but everything to do with people.

I’m going to tell you a story

Peer pressure par excellence

Peer pressure par excellence

I went out of the house yesterday, and my next door neighbour, a man who is showing significant signs of multiple business lunches, came out of the house in brand new trainers and sweats, pressing the key to open his car door. “Hi” I said “Taking more care of your body”. “Exactly”. “Off to the gym”. “Not right at this moment” he said “Hows the diet going then” I asked, “Still choosing one” he replied. “Oh, then your new approach is all about wearing sweats and trainers to walk to the car?”. “I’m breaking my body in gently” he told me.

There is a lot of pressure on companies to promote healthy eating – and employees to address it – as a vital part of a healthier lifestyle.

Urban Health

One of a number of new local segments is people who are into health where they commute. Their meals at home may well be dictated by the family (variations around fish fingers). But when they are with their colleagues they choose to go with easy health options that they buy in and around their local convenience stores. The products may not be healthy per se BUT they are a healthier choice for desk snacking and on the go lunches.

This is, as with the sweats and trainers, in part to do with peer approval. But of course there has been a huge amount of publicity around the importance of low GI and avoiding the high bursts of energy that you get, as an example, from Mars Bars and other sugar and chocolate confectionery.

New product entrants to the market come in rapidly, but make their way very slowly down the chains. You don’t see High Protein Bars, and one of our clients, the Food Doctor only acquired a very high penetration in the face of central diktat, and not because of. Other clients have 30% of their ranging opted for by retail managers. This ranging is a benefit to stores AND brands since products that overperform by 30% or more (a necessary criteria) their market share, actually build a bigger “category” as they become very important to local shoppers.

So the Urban Health sector attitude to Finer Foods is very well removed from people buying full fat-with-added-chocolate-and-loads-of-sugar yoghurt.  Look instead for 0% fat with add-your-own-fruit. This is a chance to build from the shopper up.

The Urban Health sector is growing fast. For a guide, the free from sector alone is forecast to grow to £550 million in 2014 – that’s up from £365 million in 2014. Then have a look in Holland and Barrett and check the serried ranks of the high protein products. H&B say they are “bidding to become the UK’s biggest seller of free-from products”. All this from predominantly high street outlets. Greggs have also just announced a new “healthy” range for similar reasons, alongside further record results and an interim dividend to their delighted shareholders. So much for the death of the High Street.

Contrast this with the offering in your local big retailer convenience store.

A Change for the Better

I’m not advocating replacing category management with something else. What I am doing, though, is saying that the name is redolent of a past that has got us where we are. Out of touch.

So lets call it what it should be, shopper (demand) management. And lets look at convenience stores as a hot bed of new ideas. Not a dumping ground for centrally negotiated national contracts.

This way you get loyalty from satisfaction.

This way, too, you don’t need a reward card. In fact you don’t want one. What you need is to look at what will sell in the future, not what might have sold somewhere else, yesterday.

 About Us

We identify where win/win/win Shopper, Store and Brand opportunity exists.  In partnership with the British Population Survey, we also work to identify media and content to reach all sides of these core areas. We work in particular with high growth, high interest brand areas such as health an ethnic.

Check us out here

The Wicked Which? of the West strikes retailers – and brands – together


Supermarket Pricing and Brand Promotions – Playing Dirty or Legitimate Business Practice

This week Which? announced it would lodge a super-complaint with the Competition and Markets Authority (CMA) over ‘Misleading’ Supermarket Pricing Practices. .

Which? point out that over the years they have highlighted a range of what it describes as misleading and confusing pricing tactics in supermarkets – like “dodgy multi-buys, shrinking products and baffling sales offers” – that exaggerate diPhoto: Amy Shepherdscounts.

It said many retailers are creating the illusion of savings that don’t exist and are manipulating consumer spending by misleading people into choosing products they may not have chosen if they knew the full facts.

We have been here before

Get your Head round it

Hard to get your head round

The pricing practices of concern that Which? has identified are confusing and misleading special offers; a lack of easily comparable prices because of the way unit pricing is being done; and shrinking pack sizes without any corresponding price reduction. In addition, it says that supermarket price match schemes for a basket of goods may also make price comparisons more difficult, as the range and types of products on offer can make accurate price matching impossible to achieve.

Which said that the cumulative impact of all these different pricing tactics means it is virtually impossible for people to know if they are getting a fair deal, particularly when prices vary frequently, consumers are in a hurry or are buying numerous low value items. 

Using legal powers under the Enterprise Act 2002, Which? has made the first ever super-complaint against the grocery sector to the CMA, urging it to take action. Once Which? has submitted its evidence to the CMA, the regulator has 90 days to respond. As a first step the CMA may request a market study, in which it could demand further information from the supermarkets, before escalating to a full-blown investigation.

This is, in fact, by no means a new issue raised by Which?. In fact it goes right back to the last full OFT enquiry that I was involved with as Head of Insight for the (then) Institute of Promotion Marketing. At that time the OFT issued guidelines, and the major UK supermarkets agreed in 2012 (reported by the BBC) to adopt a set of principles drawn up by the OFT. They were Tesco, Sainsbury’s, Morrisons, Waitrose, Marks and Spencer, Aldi, the Co-op and Lidl. Asda, which had not yet signed up, said it was considering the revised code. Simple things such as not having the offer period longer than the comparison period bothered them.

Other things bothered me at the time of greater concern to brands and promoters

The first was the fact that the major retailers still only saw each other as competition – so their price comparisons were not against market pricing, but against a wholly artificial construct – the Tesco price in the main. This remains the case, so Sainsbury, who now use Asda  as their benchmark, offer coupons for a gap that is impossible for the average shopper to know about. Given that the fastest movers are from Sainsbury to the discounters, and that Asda is not a natural home for the Sainsbury customer (geo)demographically this all seems very puzzling. For brands, however, this issue lead to a plethora of sizes, and the additional costs the this leads to, just to get around the straight price comparisons, that were used to force prices inexorably, and unaffordably down. 

For the shopper, who sees the competitive set as much wider, Sainsbury must start to look increasingly out of touch.

Heads they win – Tails you lose

Secondly was the way that Tesco, in particular played fast and loose with coupons, as the major distributor, and recipient in the UK. With their market size they said – we will redeem your coupons, we will take the money straight from your trading account, and we will charge you for handling. Meanwhile most of the competitors were quite happy to see a coupon as money that they could put through the till against anything in the basket. Possibly the worst examples of this were the Tesco self scan checkouts. Here all you needed to do was scan an original and put any old piece of paper into the slot. I know, I did it myself (but advised the client accordingly).

The key retailer has a position that goes; You should always use our promotion techniques no matter how poor the result simply because we make a great deal of money from it. Frankly, if it did make money for the brand it would bu up-priced so it didn’t OR you would be prevented from using it (as in dunnhumby preventing you from couponing users of competitive products)

Quis custodiet ipsos custodes?

When you can set your own comparisons and manage and report on the way you have handled other peoples money confusion and the potential for serious misuse is built in up and down the line. Not just in the areas that Which? will focus on. 

Brands, of course, lose every time.With GSCOP, saving the presence of the ombudsman, being the last resort of the desperate man. We have a client issue where a major retailer said “You will only use our in-house techniques as part of the listing process”. The in store sampling (very expensive, poorly managed), the coupon process (impossible to easily track, and given that in the case of Tesco you don’t know where they went, and where they came back) quite impossible to assess. Then when these failed to work, the challenge, fix or you are out. The fix went in, a non-price promotion technique, and was really successful  It met the criteria laid down comfortably, but the product was de-listed anyway. A clear case of an appeal to GSCOP since more time should have been given. Will this happen dear reader – I invite you to draw your own conclusion. 

Retailers need competition to temper their excesses

It is very hard to legislate for appropriate price promotions, since most could be defended strongly where they are properly used. In fact most retailers do actively set out to confuse the shopper. This they do in a wide variety of ways, changing store layouts, confusing offer statements, offer ticket forests on the shelf, own brand ranging at key shelf places etc. There are sound business reasons for this. Most shoppers do not vary from their walk, and breaking their habit pattern can deliver more sales. It does, mainly though, develop hostility. 

Up to now key retailers have managed to get away with it. From now on it they need to consider service as well as their product offer. 

Which? needs to apply common sense, and target their complaints much better

Brands have little leeway. In an era where costs rise inexorably, the shopper has become used to price stability, even often presented as price reductions. Which? suggest that they want to address pack reductions without a corresponding price reduction.

You would like to ask Which? the planet they come from. Why on earth should a new smaller size pack not be priced wherever the manufacturer or the retailer want to price it. Currently pack changes are the only way that many manufacturers have of delivering what they perceive shoppers want, and retailers tell them they must achieve. The same margin (or better) at the same price as last year, when costs overall have increased.

Where to from here. The issue that brands have is that their promotion horizons tend to be limited to the one’s that the retailers offer. Moreover, Sales Departments accept that they do not measure the value of the investment they make through this. Asking dunnhumby to measure the impact of the coupons they have just sold you is not likely to give “you have been wasting your time”..

Brands need to seriously explore other, non retailer sponsored, ways of growing the brand. Discounters are growing fast, and geo-demographic promotions to your core will build brand sales across outlets. Add to this real efforts to maximise distribution in your core areas and you can begin to build growth to your shoppers, wherever they go.

Which Say

Executive Director, Richard Lloyd, said: “Despite Which? repeatedly exposing misleading and confusing pricing tactics, and calling for voluntary change by the retailers, these dodgy offers remain on numerous supermarket shelves. Shoppers think they’re getting a bargain but in reality it’s impossible for any consumer to know if they’re genuinely getting a fair deal. So shoppers are voting with their feet to places where they can get a fair deal – at least on a level they understand. 

I say

Brands may think they’re getting a bargain from retailer promotions but in reality it’s impossible for any of them to know if they’re genuinely getting a fair deal. Change your policy and invest behind the brand, not the retailer, for a change in your fortunes. Stick with your existing investment, and anticipate no change in your fortunes.