In today’s hyper-competitive market, Consumer Goods companies are increasingly faced with the challenge of capturing shopper attention and driving more sales at the shelf. Part of this problem comes from the fact that the consumer attention span has significantly decreased, making it that much harder to maintain meaningful engagement. That, coupled with the increase in digital, has made driving in-store sales that much harder.
However, as bleak as this may initially sound, this does not necessarily mean that in-store sales have no place in today’s shopping world. The main solution to this challenge relies on the idea that consumer good companies need to work with technology, rather than treating it as the opposition.
This might sound counterintuitive in terms of in-store merchandising optimization, but there are ways to bridge that gap and drive more sales at the shelf. A recent industry report published by in a joint effort by Menasha and Path to Purchase Institute sheds light on this, here are some of the key points from their report that consumer goods companies must focus on when it comes to in-store merchandising:
1) Critically examine each of your investments
This might sound like an extremely simplistic idea, but it holds the most currency when it comes to reevaluating your in-store merchandising strategies. The shopper experience needs to be at the center of each investment. But considering how rapidly that experience is shifting, it is incredibly important to look at each of your current investments and what value they really provide.
The three key tenets laid out in the report are simple: Your investments must be centered around driving brand awareness, loyalty, and there must be some metrics in place to measure the return on your investments from these endeavors. The dynamic of these rapidly shifting markets has meant that companies must be nimble and flexible with their investments, and be ready to switch gears if it is providing the right return.
Data from the report’s survey suggests that companies have struggled with this idea and that has been part of the issue when it comes to optimization. 84% reported that their primary method for investments was based on retailer size and growth. However, only 52% stated that they had some metrics in place to measure ROI from their investments.
However, these practices are no longer providing the returns they once use to. Retailer size and growth is definitely one factor to consider, but these decisions need to be more holistic for them to be truly successful. Other factors that must be considered include deeper customer segmentation, creating priority shopper segments, strategic methods to reach these demographics across different retailers and how to create key performance indicators that will really illustrate the impact of these investments.
2) It’s just not about the large accounts
It is understandable that most consumer good companies focus primarily on their large accounts, and do not give as much attention to mid-sized and smaller accounts. This is reflected in the data, as 78% of respondents indicated that they had high levels of confidence that their sales teams were equipped with “quality customer sell-in materials for large accounts.” However, only 56% indicated a similar level of confidence for their mid-sized accounts.
There is no denying that top accounts deserve a certain level of dedication and focus, but it cannot demand all of the focus. Mid-sized and smaller accounts may prove to serve a large swath of customers than you might expect, and these accounts are the foundations of the retail industry when it comes to the sheer untapped potential they exist, according to the report.
It might be tempting to reduce the budget for these mid-sized and smaller accounts, but critically evaluate each of these accounts and where the growth potential exists for these. There are regional markets that you might be able to connect with on a deeper level, and other untapped niche markets within these accounts that could be of great help. Even on a mid-sized scale, there is a potential to grow within these markets that might difficult to achieve with larger accounts.
The report also discusses where the success lies in using shopper marketing and promotions to drive growth within these mid-sized and smaller accounts. The first step is to really understand how best to allocate investments among them based on the present opportunity. The other step is to build a model that is low-cost and does not require the resources or scale that might be reserved for larger accounts. Once this is established, creating a rulebook for teams that focus on best practices building these sell-in tools for different retailers helps create lasting success in this regard.
3) A deeper level of focus on data
Using data, insights and other consumer metrics will help create a more nuanced picture of what is needed going forward. The earlier point about using technology to gain more traction, rather than fighting it, comes into play here. Most companies are comfortable using high-level national and customer insights when it comes to building their strategies, which is definitely a good start.
However, only 31% of respondents indicated using cross-channel or cross-retailer insights. This is crucial data that could really help create more detailed strategies that have better targets, but many are choosing to ignore it. For example, only 12% of respondents stated that broke their insights down to the store cluster level. However, drilling down to that level is a trove of information that cannot be attained from only high-level insights.
This data can provide valuable information on shopping behavior, trip missions and genuinely understanding the start-to-end customer journey – and help you understand how you fit into that journey. The key is to use a combination of high-level insights with specific data points to create strategies that are far more comprehensive. This will create a more tactical approach, which is likely to have better results as it will be far more targeted.
The report breaks this down further, especially in understanding the different types of thought that go into building strategies on a national level and breaking it down to the store level. There is a balance between constructing strategies that are designed to be part of the “planning phase” on the national level for consumers while tailoring towards more impulsive-buy strategies on the store-cluster level.
Moreover, it is important to understand what data you are buying and whether this is the right investment. Companies may choose to buy loyalty data that ultimately does not provide the right level of information, or it simply does not address what they need it to. Without strategic use, loyalty and other types of data will never deliver the right results to make it worth the investment. Invest in cultivating the skillset to handle data and develop an insight strategy that the data can be used for.
The report also warns of the risks of not building a comprehensive data strategy. It might be tempting to be insular with the data, and only use proprietary or in-house data in these measures. However, this leads to a risk of being siloed and not truly building a complete picture of consumer habits. Using a combination of in-house data as well as retailer and channel data ensures that you are receiving the full picture – a truly powerful tool that can really drive success when used correctly for new programs.
There’s a ton more to talk about, but I’ll leave it here for now as I begin the research for my next article. Stay tuned!