Excellence retail execution has been a focus for FMCG companies for several years now as they all concur that retail excellence results in increased sales and market share. Each company has coined its own term for this.

‘Perfect Store’ by Unilever, ‘Golden Store’ by P & G, ‘Right execution daily’ (RED) by Coca Cola and ‘Flawless Execution’ by PepsiCo.

The concept was popularised in the early 2000s by Bain & Unilever to maximise ‘sell out’ in store (i.e. maximising sales to us, consumers!) Unilever adds an additional ‘P’ to the 4P framework by Jerome McCarthy. Their 5 Ps for ‘Perfect Store’ are:

Product – The ‘type’ of product or brand sold by the store is important. For example, a 24pk of a snack brand will not sell as well as a single serve or sharing size does in smaller convenience stores. On shelf availability is an important KPI to consider when it comes to products. The consumer should be able to find the product on shelf when they come in to buy it. The ‘Out of sight, out of mind’ principle applies here. They discourage customer loyalty and can spur the switch to a competitor. When brands have their finger on the pulse of retail execution, they can avert out-of-stocks before they happen.

Tricana – An example of flawless on-shelf availability and placement

Place – The placement of the SKU/brand on shelf determines volume of sales. Again, the out of sight, out of mind principle plays a key role here as placement on the highest or lowest shelf is not as desirable as eye level placement. ‘Place’ covers the number of ‘facings’, the shelf space allotted to the brand and placement of the brand alongside complementary brands/products (Eg: placing icing sugar, flour and baking powder together or ketchup, mustard and mayonnaise together ).

Price – A brand may implement all the best practices of a perfect store and still not succeed if pricing is not right. The price should not just yield companies a healthy margin, but also be competitive vs other brands/SKUs in the same category. Also, it is key that the price is indicative of other qualitative factors that differentiate the brand from competition, but more on Proposition later. To complete the circle on Price, for pricing to effectively drive sales, it is important to ensure that the price tag that communicates the pricing is on shelf close to the product.

Communicating price and promotion

Promotion – Promotions are an effective driver of sales. Promotions are mostly made for star products and new product launches. However, these days, it is common for brands to run promotions for certain times of the year that are conducive to sales of the brand. Eg: Wine sales in the run up to Christmas; Chocolate sales in the run up to Easter etc.

An excellent example of ‘Proposition’ – Communicating the differentiating factor

Proposition (the 5th P added by Unilever) – In addition to the 4Ps from the 4P framework, Unilever has a 5th one – Proposition. We touched upon this in ‘Price’. It is important that the brand has distinguished itself from competition and gives consumers a reason to choose your brand vs completion. Proposition is usually communicated through shelf ‘talkers’ aka shelf ‘barkers’

Retail execution is critical for consumer goods brands to win in today’s competitive market. Consumers have limitless options in virtually any category they’re shopping for, so making products available and appealing to consumers is essential to winning share. We’ll delve deeper into each of the 5 Ps in the next few weeks.

To learn more about how a data driven approach can ensure the 5Ps are executed and to learn more about retail execution, email me on veena@salesbeat.co

Published by Veena Giridhar Gopal

After more than 20 years working in the FMCG/retail sector, Veena is now co-founder & CEO of salesBeat. salesBeat has an AI driven platform that uses micro and macro factors to model consumer buying behaviour and makes predictive recommendations of optimal stock levels to FMCG sales people who sell into supermarkets, distributors & wholesalers, eliminating lost sales due to out of stock.

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