Convenience stores – a key battleground for brands

15 years ago, the key battleground for brands was discounters. Aldi, Lidl and Iceland were growing rapidly and FMCG companies were looking at how they can gain share in these channels. Convenience was an important channel, but the entire channel usually got the same level of attention as a large supermarket chain did.

According to IRI, the convenience channel in the US grew by 7.7% in Q3, 2021. According to NielsenIQ, in the UK, the channel grew by 3.3% in the 4 weeks to 11 September 2021 vs supermarkets, which grew by 0.6% during the same period.

In mid to late 2020 and all of 2021, convenience stores were the go to channel for shoppers for regular ‘top-up’ shopping. This was because of two key reasons:

  1. While large supermarkets were suffering from empty shelves and stock-outs, most convenience stores, especially the independents, were well stocked.
  2. The stores were small enough that the consumer could come in, shop and leave the store in a fraction of the time – an important consideration during the pandemic. Speed of service was the key differentiator for convenience stores vs traditional retail during this time.

Convenience stores have a history of providing local products to the communities they serve. These retailers typically have stores that are smaller in footprint, thereby providing grab-and-go solutions to their customer base.

Typically each store owner or manager places orders with suppliers or wholesalers, and as they work closely with/also help with the tilling, they know what consumers in their neighbourhood are looking for. This meant that, in 2021, convenience stores had the right levels of stock of the right brands and products, while supermarkets had run out of stock as they were expecting sales similar to previous year sales and convenience stores had adapted to the way people shopped and what they shopped for post 2020.

So what are some of the watch outs for sales people and how can they grow sales at convenience stores?

  1. Partner with wholesalers and distributors for sales – Instead of selling to wholesalers who then sell into convenience stores, consider partnerships with your wholesaler for direct sales into smaller stores. Then treat all the convenience stores in one postcode or region the same as one customer. Visit them often to take orders and liaise with your wholesaler/distributor to ensure the order is delivered.
  2. Be prepared to switch up SKUs sold at the convenience store you sell to – As the store owner is closer to your consumers, they are more likely to change the range they sell frequently to provide their shoppers with what they are looking for.
  3. Develop relationships with the stores that helps you sell directly, no matter what technology they adopt – As the format grows, the stores are likely to adopt technology and more centralised buying (wherever one company owns the stores) to keep costs low. This is likely to result in store owners/managers not understanding their consumers as well as they used to. And may order the wrong quantities or the wrong products. Sales people who manage convenience stores should consider working closely with the store managers and encourage orders on a store level rather than at a centralised warehouse level/buying group level.
  4. Help keep prices competitive – In 2022, with rising inflation and costs, convenience stores will find it challenging to maintain marketshare as they would need to pass on at least part of the cost increases. Work with store owners and managers to keep in-store prices competitive or comparable vs supermarkets.
  5. Invest your time to understand shoppers and consumers around these stores better – Spend time at these stores and in their neighbourhoods to understand the people who shop there, what they buy, when they shop and how they live. Work closely with the store owners on re-order volumes, optimal in-store stock levels and promotions ideal for each store.

By working closely with convenience stores, your brand and your sales grows at par with the growth of the channel. Then it is up to the marketing & shopper marketing team to ensure you gain share from competition and grow ahead of the growth of the channel.

Pantene/Walgreens collaboration to increase sales of Pantene SKUs

In 2013, more than 300 new haircare products were introduced in the U.S. and Pantene was struggling to stay relevant. Consumers were quick to switch to competition and the brand’s key retail partner, Walgreens, was losing confidence. Pantene needed to turn around brand performance at Walgreens to retain distribution, and increase penetration and retention without needed to develop new products under the Pantene brand.

Pantene’s target consumers were women in their late 30s to mid 40s who ‘enjoyed the confidence’ when they looked good. Pantene knew that one of the triggers for shopping for hair care is a ‘bad hair day’ caused by changes in humidity.

As neither women nor Pantene could influence weather, Pantene collaborated with Walgreens to provide daily ‘haircasts’ for women, telling them what to expect of their hair everyday, which Pantene product could help and which nearest Walgreens had it in stock. The daily haircasts were based on forecast humidity levels every day. Pantene and Walgreens used a multi channel approach for this campaign, leveraging social media, digital, mobile and in-store marketing.

Just by tracking humidity levels and making relevant recommendations to manage hair during days with high/medium/low humidity and ensuring that the closest Walgreens always had the relevant products in stock, Pantene was able to successfully out-compete the 300 other new brands and products that had been taking share from Pantene and achieved:

  • a 7% decline in sales vs prior year to a 24% increase in sales vs prior year
  • 10% uplift in sales vs plan for the year

In addition, Walgreens experienced an additional 4% uplift in sales for their haircare category as a whole.

If you are interested in learning more, Mobile Marketing Association has published a case study on this.

Diversity, Equity & Inclusion – the topic du jour

Much has been written about Diversity & Inclusion in the FMCG sector. It has to be said that the FMCG sector is possibly one of the more diverse sectors I’ve seen to date. However, this varies significantly from one region to region and from company to company. Today’s blog explores what some of the best in class companies, for diversity, do differently.

Senior and middle management who are advocates of diversity

It is not enough that companies have senior management who are supportive of diversity in the workplace. Middle management also need to be advocates of this. At the end of the day, middle management are the senior management of tomorrow. Also, middle management make the active hiring decisions of today.

Colour/gender blind hiring practices

Companies should encourage applicants to apply with CVs that do not mention names or gender details and with no photographs. While it is common practice in most countries to not note gender in CVs and to not put photographs in, it is equally common practice to look up applicants on LinkedIn. So more companies should consider asking candidates to apply without names by allocating serial codes to applicants. Companies should consider communicating through an app/platform that shields the applicants’ email (which can give clues to their name).

A workplace welcoming of flexible working

I have been lucky to previously work in companies that were supportive of flexible and remote working. While certain managers were more supportive of this than others, I learned that working from home does not need to impact the quality of output and sometimes, it helps generate better work in less time than expected! So companies should not shy away from implementing flexible working.

It has been widely noted that flexible working promotes diversity, equity and inclusion in the workplace. “Workplace flexibility can be mutually beneficial to an organization and its personnel, and is recognized to help achieve gender parity,” said Fatou Haidara, Managing Director of the UNIDO (United Nations Industrial Development Organisation) Directorate of Corporate Management and Operations.

Flexible working does not have to mean working from home permanently. In fact, that can be a deterrent too in case their home life is chaotic. Flexible working simply means allowing your employees to work from home when they need to and from an office during other times. Also, it may include different hours. It maybe that some people work 10 hours on 4 days and just do a 4 day work week, some do the regular 8 hour, 5 day work week and others, somewhere in between the two.

I keep hearing that it is difficult to find female applicants for certain roles, especially when it comes to technology and sales. But I’ve never had a problem finding great female talent for technology or sales roles in any of my previous roles or at salesBeat.

The key is to signal how open and supportive your team or company is to people from different backgrounds or to neuro diverse people.

Thriving in the era of uncertainty

In December 2021, Harvard Business Review published a book by John E. Katsos and Jason Miklian – Preparing for the Era of Uncertainty. This book posits that we are currently living in the era of uncertainty and gives organisational leaders the frameworks and tools, that are used by organisations and businesses in conflict zones, to survive and even thrive.

The book focusses on the culture that needs to be embedded in the organisation and the leaders of the organisation and includes interviews with seasoned leaders, charitable organisations that operate in conflict ridden parts of the world and draws learnings from communities that share purpose.

This book couldn’t have been more timely as we went from living through Covid and into war. For any business leader interested in learning more about the leading through uncertainty, I highly recommend the book, Preparing for the Era of Uncertainty

In this blog, we look at how sales teams and leaders can survive and even thrive during this time.

The reason HBR and the book consider this the era of uncertainty is due to all the various forces impacting our day to day lives. Even prior to the Coronavirus pandemic, we were living through rapid, unrelenting change – from unpredictable weather upending our expectations of living through normal seasonality to unexpected political and economic outcomes and everything in between. We had 2020, which necessitated an entirely new way of living and working. And now we have rising inflation and the conflict in Ukraine.

This has not just disrupted the way we live, but also the way we work. This disruption is most felt in the fast moving consumer goods(FMCG) sector (aka consumer packaged goods (CPG) sector) where any changes to the way we live and work impacted sales in the sector.

The disruption is most felt in sales and in marketing/innovation at these companies. This is because of two reasons:

  1. The first, as you may have guessed, is that these products are meant for consumers and any factor influencing our decisions impact sales and how we perceive the brands. Given the prevalence of ‘Cancel culture’/’Call-out culture’ companies and brands need to be hyper-aware of public perception of their brands.
    A recent example is how consumers took to social media with #boycottPepsi, #boycottCocaCola & #boycottMcDonalds, which were all trending last weekend.
  2. The second is that fast moving consumer goods companies are at least one step removed from consumers as most companies/brands are not direct to consumer. They sell into ‘aggregators’ like supermarkets, convenience stores, wholesalers and distributors, and the product is available to consumers through supermarkets, convenience stores and other grocery stores. So companies are not as in-sync with the end consumer as they need to be. This results in major jolts to sales and marketing when unexpected external factors influence consumer behaviour.

While these constant changes may be viewed as a threat, they can also be viewed as opportunities by sales leaders and teams as all companies in the sector are facing the same challenges. This then becomes more about transforming risks into opportunities.

So how can companies do that?

Data can tell a story. While so far, companies have been using data to provide analyses of historical performance, times dictate that companies start using data for predictive purposes.

The wealth of data that FMCG companies and retailers have to hand can be processed through the lens of the consumer to understand how they would behave given different circumstances. Channel, brand and change management decisions can then be taken in accordance with these results.

What are consumers likely to buy in the near term? How much are they likely to buy?

Both these questions can be addressed by data. However, companies need to transition from manually processing and interpreting their data to using AI driven platforms and models to process the data and interpret these results so they are not constantly chasing numbers, but are ‘on top of it’.

Companies can also use this time to trial new ideas and concepts for launch.

Times like these always bring with them opportunities. Looking back at history, revolutionary ideas were adopted & owned by consumers, primarily during periods of crisis. FMCG companies and supermarkets should use this time to trial product ideas and concepts that have, so far, been viewed as a risk by management.

Sustainability and cutting out (plastic) packaging

This has never been more critical. 2020 & 2021 have been the two worst years for climate change to date, despite fewer people commuting to work. Consumers are now paying attention to brands that are putting sustainability first. There has been a noticeable increase in demand for brands that have been doing this through the pandemic. Trialling these concepts during these uncertain times can help set you apart from other brands for consumers and help drive sales during these difficult times.

Pay attention to your consumers

While this is not a new concept (both CPG & FMCG have the word consumer front or centre!), both brand owners and retailers need to pay more attention to social media channels to track and respond to consumer sentiment about their brands. This can help with not just retaining, but also growing market share during times like these as you would be better placed to respond to or anticipate consumer needs and wants.

These days consumers do not shy away from expressing their opinions on social media. However, companies currently are not leveraging this information enough. They use this information primarily for new products/innovations and marketing activities. However a case can be made for using this information to understand consumer demand, sales volumes to be precise.

If you would like to discuss any of the above in more detail or gain more information on how data can be leveraged during this time, feel free to email me on veena@salesbeat.co

Surviving inflationary & supply chain pressures

At the start of 2022, everyone was breathing a sigh of relief as we started to accept that non-lethal variants of Covid-19 were going to be a part of our lives going forward, just like influenza and how we live with it.

However, by February 2022, everyone was talking about rising food prices and how inflation was at a record high. This was because the agricultural sector had been impacted by the lack of people available for sowing, pruning and harvesting due to the pandemic. As sowing season was not maximised and 2020 & 2021 were two very unpredictable years for weather, the resulting harvests were/are not as plentiful as they could be.

All of these had impacted food prices by Jan/Feb 2022. However, by the end of February, the conflict in Ukraine had started and till date there has been no sign of this abating.

In fact, on Friday 11 March 2022, there were reports of the Russian forces hitting grain silos, ports and the infrastructure needed to gather and distribute the harvest, as well as food storage facilities according to The Toronto Star and The National post.

This is expected to have significant further impact on availability and prices of food and oil prices, which in turn drives up inflation further.

Between Russia & Ukraine, they export c. 25% of the world’s wheat, and c. 70% of the world’s Sunflower oil (46% from Ukraine & 23% from Russia). Ukraine is a leading corn(c. 13% of the world’s corn) and soybean exporter as well. For centuries, Ukraine was considered the breadbasket of Europe. So the conflict has a major impact on food prices. Even before the conflict, prices for sunflower oil were expected to increase and wheat prices had already increased due to the constraints imposed by climate change and the pandemic.

The alternative to the significant current and expected shortfall in Sunflower oil and Wheat supply in 2022 is to source Sunflower oil from the US and wheat from Australia. However, market pressures and increased demand for US Sunflower oil from other countries has resulted in already high prices skyrocketing due to limited stocks available, and Australian wheat farmers are struggling with supply chain bottlenecks and climate change challenges.

This shortfall in food supply is not expected to ease in 2022 as in the Ukraine/Black Sea region, the sowing season for Sunflower oil is April/May for harvesting in September/October, for Wheat harvesting is in August/September and for corn, planting starts in early May and harvesting in September.

Further to these food related bottlenecks, we are also facing rising prices for oil and gas due to sanctions on Russia and complex supply chains due to the conflict. Russia produces nearly 11m barrels of oil a DAY. They are the 3rd largest producer following the US and Saudi Arabia. Russia is the world’s biggest exporter of oil to global markets and the second-largest exporter of crude oil, exporting about 2.85 million barrels per day by sea lanes and pipelines, according to the International Energy Agency. In 2021, 70% of Russia’s oil produced was exported. As a result, oil prices have jumped by more than 30% since 24 February.

What’s more Russia is the largest supplier of Gas to the European market. The combined impact of the two are putting further pressure on already high energy prices and driving inflation up even more.

Due to the price increases expected, consumers should consider buying locally produced grains, beans and oils, and use public transport (or bike/walk) to reduce spend and ease the pressure on the above mentioned foods and oil/gas in 2022.

Fast moving consumer goods companies are caught in between with reduced supply of raw materials and fuel and soaring prices for both. While there are options and alternatives for us as consumers, companies that produce food and beverage brands have fewer options.

For example, Corn is an essential ingredient of Kelloggs corn flakes and they’ll find it difficult to move from using Corn as a major ingredient.

They would also experience increased costs (from increased costs of corn and the energy used for production and logistics), which, if they pass on to consumers, would impact demand and sales in 2022 and, alternatively, if they decide to absorb all or some of the costs, would significantly impact on margins and profit.

While we’ve used the example of The Kellogg Company, all FMCG (CPG) brands will experience this, some worse than others. For example, those that use oil, wheat, soy beans or corn as an (essential) ingredient or in the production process will see significant cost increases and those that do not will still experience cost increases due to energy price increases.

In order to mitigate the revenue impact, FMCG/CPG companies will need to look toward increasing volumes of sales through new products, markets or consumer groups. In order to manage costs they need to look toward reducing the costs of other raw materials that go into their products.

Continuing with my example above, The Kellogg Company could look to reducing the cost of packaging and printing for its corn flakes by looking to cheaper options for its cardboard and printing. While this may not mitigate the increase in the cost of corn, the reduced cost of packaging and printing may help mitigate the increase in corn and energy prices to an extent. Another, more environmentally friendly, option maybe to use this as an opportunity to introduce packaging free product and refillable canisters at stores. This can help The Kellogg Company reduce the cost of packaging significantly while attracting more consumers for its climate friendly practices.

Refillable stations of The Kellogg Company range at ASDA in the UK

While in the short term, they may still experience some cost increases, in the long term, they would be set up to overcome significant economic and supply chain shocks due to a diverse supplier base, to resist competition, and retain or even grow their market share due to their environment friendly practices.

Sustainability and stock

For FMCG/CPG companies, optimal retail stock levels is about maintaining enough stock at a retailer’s warehouse or at a store level to eliminate out of stocks in stores. For retailers, optimal retail stock levels is about maintaining just enough stock to eliminate overstocking in stores or at their warehouses.

However, optimal stock levels need to be about balancing the two – ensuring that consumers always find the SKUs they want at stores while eliminating overstocking. Due to complex demand patterns, dictated by customer buying behavior, this can be difficult to achieve.

Today we explore how sustainability and stock levels are linked and why it is imperative for FMCG companies to ensure they maintain optimal stocks and sell optimal volumes to retailers. Over the past 5 years, we’ve heard of several companies in the luxury sector disposing of their excess stock (burning them or sending them to landfill) and the adverse impact this has on climate change and the environment.

Many of us have not heard of FMCG companies doing this. However, those of you who are close to or in the FMCG sector know that packaged food is often destroyed once past the expiry date or given to farms as cattle feed.

While companies see this as a waste of money, this has even greater implications on sustainability. Not only does the production process consume energy and resources, but the destruction process is as energy intensive.

With sustainability becoming the epicentre for business strategy in FMCG/CPG companies, focus should not just be on sourcing, water utilisation, energy consumption and minimising waste in the production process. Managing stock and raw material write offs is an integral part of this.

Morrisons, one of the large supermarket chains in the UK, recently made the news when they announced that they were scrapping expiry dates on their range of own brand milk. According to Morrisons, Milk is the third most wasted food and drink product in the UK and 1 litre of milk can account for up to 4.5kg of CO2.

Personal care and cosmetics products have longer shelf life, but are also known to expire and either sent to landfill or destroyed. These are often mixed with coloured dyes to prevent reuse, if sent to landfill. And if you were wondering about the carbon footprint for personal care products and cosmetics, this may give you an indication. An average bottle of shampoo (c.30 hair washes) can account for up to 10kg of CO2. And when expired shampoo units are sent to landfill or burnt for energy, the implications are much worse.

Retailers and FMCG companies should be looking at data driven software that can model consumer buying behaviour to optimise stock levels at retailers, minimising write offs, and the resulting carbon footprint.

Can a shift in power balance help the FMCG sector?

Years ago, the power balance between manufacturers (suppliers) and retailers was skewed towards the former, but with consolidation in retail and the formation of large players like Tesco & Walmart, the power balance favours retail currently.

Imbalance driven by low fragmentation in the sector

In the UK, the large grocers/supermarket chains (Tesco, Sainsbury’s, Morrisons and Asda) had ~67% market share in 2021 according to a survey by Kantar Worldpanel. This collective share is a key driver of the imbalance.

The largest UK grocer

The power dynamic has been shifting since the 2007-08 financial crisis, which saw the rise of discounters and launch of private label brands by the grocers. In 2020/21, the landscape changed yet again, driven by the acceleration in online sales and in sales through on-demand grocery delivery companies. However the change has not been significant enough to balance the two sides.

Zero sum game: Retailer margins or FMCG company margins?

The large grocers and FMCG companies have effectively locked themselves into a zero sum game.

Grocers have been charging their suppliers (FMCG companies) listing fees and slotting fees to ensure they deliver margin growth, while at the same time promoting and selling own label brands (significantly cheaper) alongside their suppliers’ branded products.

This has led to large FMCG companies boycotting certain grocers, which in turn has lost the companies large swathes of their market.

Not surprisingly, the result is a win-lose situation with any moves by either side impacting the other negatively.

While this strategy has previously enabled the grocers to source brands at low costs and provide consumers with a wide range of SKUs at competitive prices, the reliance of FMCG brands on overseas suppliers and of the grocers on just in time ordering to keep costs low, has given rise to unprecedented levels of stock outs in stores, with everyone, including consumers ‘losing’ in this game.

Data as the new battleground

More recently, data has emerged as a key battleground for both players. Retailers these days have a wealth of data around sales, which they currently do not share on a realtime basis with their suppliers. This is usually because sharing data is not part of the retailer’s company culture and they fear a rebalancing of power.

As communication between retailers and suppliers is usually very transactional, even point of sale data for each of the SKUs that the supplier sells the retailer is not shared.

However, the Walmart/P & G collaboration that was launched in 1988 is evidence that data transforms this relationship from a perceived zero sum game into a win-win situation. The collaboration was instrumental in growing the retail sales of P & G brands at Walmart from what was $350 million in value in 1986 to $10 billion in 2017 (interview with Tom Muccio, the ‘father’ of this collaboration, on valuecreator.com). This has also resulted in a better and closer relationship between the two giants.

All Good Diapers launched exclusively at Walmart by P & G

Why is this important now?

Sharing the latest retail data on sales and inventory levels helps suppliers/FMCG companies plan for sales much better, which in turn drives their plan for raw materials and production runs, leading to accurate stocking at warehouses.

This then ensures that any purchase orders placed by retailers are fulfilled in their entirety, eliminating stock outs at retailer warehouses. This collaborative approach can lead to the slow demise of the current supply chain crisis that has gripped the world since 2020.

Collaborations between retailers and suppliers can ensure that the retailer is always in stock, ensuring a win-win situation for all – FMCG companies, supermarkets, their employees and consumers.

Proposition – A ‘P’ added by Unilever’s framework

A proposition emphasises the USP of any product. Crafting a simple, focused and clear winning proposition can be complex and time taking.

A framework to derive your brand’s USP

Consequently, marketers and sales teams strive to extract learnings from the past, and drive bigger and better innovations for the future. A successfully crafted proposition creates an imprint in the target consumers’ minds to the point that they think of the brand synonymously with the product. Example: The brand, Vaseline and the product, petrolatum, Sharpies and permanent markers, Band-Aid and adhesive bandages…

Chapstick and lip balm

The USP may be product purity, awards associated with the product, value for money, a cause that it stands for etc.

For some brands, it involves creating a narrative around the product. Its aim could be to educate the shopper, to awaken an emotional response or a call to support a mission driven cause. Eg: Tony’s Chocolonely, whose mission is a 100% slave free chocolate.

Most companies focus such propositions on their star brands and SKUs. This way, the benefits of customer loyalty and sales could even extend to different, newer versions of the same product resulting in a sales boost of the overall product category.

How do you communicate your value proposition?

These days, the proposition is most commonly communicated on e-commerce sites, whether that is the retailer’s site or one that is direct to consumer.

In store, proposition is often communication through shelf barkers/talkers. Gondola end displays are used as well. 

Stocking hero SKUs near or at check-out counters is another way to augment brand visibility and communicate proposition.

Crafting succesful propositions

So what are the elements of great value propositions? We have 5 for you to consider.

  1. The rule of 3: Propositions that sell more than three benefits often fail as consumers and shoppers fail to see the key benefit. Also, consumers/shoppers start questioning the assertions of the proposition and consequently trust the brand less.
  2. Emotional or mission driven appeal vs functional benefits: Focussing on a brand’s functional benefits commoditises the product and makes it easier for consumers to switch brands. To maintain share and to encourage more consumers to buy your brand, focus on the emotional or mission driven aspects of the proposition. Mission driven brands have been shown to retain market share even in the most challenging of circumstances.
  3. Include consumer and shopper benefits: Often times, the shopper is different from the consumer. For example, when parents go shopping for breakfast cereal for their children or when a woman buys shaving products for her male partner or when a man buys feminine care products for his female partner. It is key for the proposition to appeal as much to the shopper as the consumer.
  4. Sustainable differentiation: Ensure that your proposition remains relevant for the long term as well as the short. If your point of differentiation focusses on the problems of today and is not expected to be relevant beyond a certain period, your brand is likely to lose appeal beyond that period.
  5. The value proposition for your customers (for those brands that are not just D2C): The above 4 elements are often well thought through as a part of the organisation’s marketing and innovation process. However the value proposition for the customer is less thought through and often purely financial in nature. An effective customer value proposition combines both financial and emotional considerations and is often laid out when the customer is evaluating a brand or a SKU for listing at stores.

If you’d like to learn more about crafting successful value propositions for your brands, email me on veena@salesbeat.co

Process – A newer addition to the traditional 4Ps

So you have a great product and you have defined and validated your target audience(consumer segment). How do you deliver your brand/SKU to the customer(brick & mortar/online) and make it available for your target consumers to buy? The next P, Process, covers this aspect.

The sales process followed in any organisation influences execution in store and how the brand/product is perceived by the consumer. As for your customers, it is crucial to make sure you’re easy to do business with, meaning you’re efficient, helpful and timely. 

The sales process followed directly impacts execution, including delivery of your brand/SKU to customers, in-store availability, placement on shelf, how communication with the customer is managed, new product launches and so on. An effective sales process will include all aspects of the 7Ps and describes the series of actions or fundamental elements that are involved in delivering the SKU to the customer, for the consumer to buy.

By making sure your team has a good sales process in place, you will also save time and money due to greater efficiency, and your standard of service to customers will remain consistent and high, which is excellent for developing a great brand reputation and to build a great relationship with the customer.

The more seamless and personalised your sales processes are, the happier your customers will be. Customers typically feel frustrated or dissatisfied by late shipping, additional costs, poor communication or a lack of support and when brands/SKUs run out of stock in store.

Every part of the customers’/consumers’ journey has to be seamless and efficient. 

Regularly assessing, adjusting and adapting your sales processes will help to structure your sales efforts so that your team can function at optimal efficiency. A great way to do this is to borrow from the tech industry. Map your customer and consumer journey on a regular basis. How does your brand get to the final user? What are the various steps in the journey to the final user/consumer and what process do you have in place that facilitates this? Prioritise elements that overlap with the customer/consumer experience.

The more specific and seamless your sales processes are, the more smoothly your sales teams can carry them out. If your sales team isn’t focused on navigating procedures, they have more time to build great customer relationships, enabling the business to grow.

Some elements to consider are as below: 

  • Is your customer carrying the right levels of stock? If too little, how much more needs to be ordered and why? If too much, how can you help the customer reduce this before stock needs to be destroyed/written off?
  • Is your logistics solution cost-efficient and timely? What does your scheduling and delivery logistics look like?
  • Will your customers run out of product at critical times?
  • If you are an e-commerce business, do items ship reliably from your website?
  • How often do you meet with the customer’s team and how do you communicate price changes, POS artwork changes and packaging changes to customers?
  • What technology do you use? How can your customer access it? Do they need access?

If you get more than one complaint about any element of the sales process, understand what’s going wrong and develop a solution. 

When you get your sales process right, your sales team will

  • be more productive, manage more customers and also have better relationships with customers as a result.
  • maintain or gain market share for your brand. Fewer customers delist your brand/SKUs as your team responds immediately to consumer needs/feedback.When people love your products, they experiment less and so remain loyal to your brand.
  • receive feedback from customers and consumers, and ensure it reaches relevant decision makers within the organisation. Feedback helps you change what needs to be changed, and helps your business grow.
  • sell and deliver the right volumes of your brands/SKUs so your customers are neither overstocked nor understocked.

This includes any technology sales teams use in their normal course of work. This ranges from sales intelligence solutions teams use to calculate sales volumes through to merchandising apps that monitor shelves.

If your sales process is efficient and any sales technology you use is in keeping with the process and with market conditions, your brand thrives and so does your business.

If you’d like to learn more about how to set up an efficient sales process or how to maximise sales team productivity using the right sales technology and tools, email me on veena@salesbeat.co

Product – the most important element of retail execution & the marketing mix

Product is, probably, the most crucial component of the 6Ps. It originates directly from your consumer through an unmet need that they have.

This can be a physical item, a service, a platform or software. It is produced at a cost and is made available to the target audience at a price to help fulfil the need. Whatever the nature of the product, it always follows a lifecycle. A company can increase its competitive edge by ensuring a thorough understanding of the potential lifecycle of the product for proactive launches of product extensions or timely re-launches. Re-launches help the brand/product to remain relevant in a changing market or at the end of its lifecycle.

Product lifecycle

The 4 commonly used stages are introduction, growth, maturity and decline.

We like the hubspot model as it breaks this down into 6 stages – development, introduction, growth, maturity, saturation and decline.

Development: The development stage of the product life cycle is the research phase before a product is commercially launched for wider consumption. In the FMCG context, this is when the innovation team develops/conceptualises the product and the branding in collaboration with the R & D team, with key consumer focus groups providing feedback.

Introduction: The introduction phase is when a product is commercially launched. In the FMCG context, this is when marketing teams begin building product awareness amongst consumers and sales teams reach out to potential customers. Typically, when a product is introduced, sales volumes are low and demand builds slowly. This phase is dominated by advertising and marketing campaigns educating both the consumer and the customer (supermarket/wholesaler/distributor etc).

Growth: During this stage, consumers have accepted the product in the market and customers are beginning to buy in. This is the stage when competition begins developing.

During this phase, marketing campaigns often shift from getting customers’ buy-in to establishing a brand presence so consumers choose them over developing competitors. Additionally, as companies grow, they’ll grow distribution at existing and new customers.

Maturity: Once the brand/product gains strong foothold in market, it enters the maturity phase, with gradual slowdown in sales. The brand/product is already the market leader and demand grows only at the replacement rate.

Saturation: This means that a majority of the brand’s/product’s target households will own or use the product. At this stage, sales grows more or less on par with population. Price competition becomes intense and the brand/product teams focus on retaining shelf space and even their listings at stores.

Decline: If the product/brand doesn’t become or retain its position as the preferred brand for consumers, it enters the last stage – decline. Usually, this happens to strong brands only in the case of industry transformation. Eg. Kodak. Sales will decrease during this time and the only way to win at this stage is to innovate and launch a new or transformative solution.

It goes without saying that functionally, the product must be able to perform its function as promised and it must be available when the consumer needs it.

At this moment in time, availability in store is proving to be a bigger challenge than others. This is driving consumers to look towards what they already have for solutions and in the cases of some products/brands, is speeding up the onset of the ‘decline’ phase before the products/brands even get to the ‘saturation’ phase.

Why is availability at risk?

2021 has been a challenging year for the grocery sector. While the HGV crisis was not specifically driven by the pandemic, it only made it worse. This has caused unprecedented levels of stock outs in supermarkets. And then there is the legacy of COVID on consumption behaviour.

Covid has had a lasting impact on our lives, from the increase in home based working (driving higher consumption of toilet paper and cleaning products at home vs the office) to cooking meals at home instead of eating out (increased demand for oil, salt, cooking ingredients at the supermarket vs at wholesalers/distributors to the on-trade). People have realised that cooking at home during the pandemic has helped significantly with savings. The same goes for consumption of beer, wine & spirits at home instead of at the on-trade. These are behaviours that are expected to last, especially as the impact of price inflation is felt at home.

The above changes, combined with just in time ordering and production followed by retailers and by suppliers in this sector is putting pressure on availability.

As 2020 demonstrated, at one point, availability trumps price and brand loyalty. And, at the risk of using an over tired idiom, out of sight, out of mind.