Place/Placement – where do consumers find your brand?

As you can tell, this is a KPI most applicable to brick & mortar stores. Where the brand/SKU can be located in a store has an outsized impact on sales.

There are 3 components to this:

  • The aisle (where on the shop floor) where your brand can be found
  • The arrangement on shelf
  • Share of shelf

The aisle

When consumers walk into the store, they usually have a list of brands/SKUs they’d like to buy. Based on previous in-store experience or based on aisle labels, consumers can then locate the shelves on which these brands/SKUs are stacked. It is key that brands and SKUs are placed in the most intuitive aisle/shelves as it maybe hard for consumers to find it otherwise. If this happens, it is likely that the store/brand may lose the sale.

It is equally important to also place your brands/SKUs on shelves adjacent to complementary products, to encourage impulse sales. For example, the consumer who walks in to buy baking powder to bake a cake, may end up buying cocoa or icing sugar which is placed adjacent to the baking powder. Another example is the instance when a customer buys a dip that’s placed in the crisps(chips)/snacks aisle.

The arrangement on shelf

Important shelf arrangement KPIs are:

  • eye-level product placement,
  • sequence of products,
  • point of sale materials,
  • adjacencies (which we touched on in the previous section),
  • planogram compliance and
  • category separation

In a store, shelf space allotted to a brand is limited. Eye level shelf space is prime real estate in this context as this encourages trial and impulse buys.

Eye level is ‘buy’ level

Also, given the space constraints, sequence of placement becomes important as this can have a major influence on sales. Many brand owners prefer to place associated products near their ‘hero SKUs’. Eg: placing conditioner right next to their hero SKU, a shampoo. This encourages impulse buying and may encourage a consumer to switch brands eventually.

Point of sale (POS) materials are perhaps the most under-utilised levers. POS materials are usually present on or near shelves in the form of posters or shelf talkers. They may also be free standing display units like the ones seen at at the end of an aisle, close to the entrance of the store or near the tills, where people are likely to make an impulse purchase while waiting to pay. They often introduce a new launch, a promotion, or the value proposition of the hero SKU. Challenger brands usually are great at this.

A great example of point of sale material

A Planogram is a detailed schematic about how products will be placed on shelf. There are 3KPIs that relate to this:

  1. Availability
  2. Placement in the right area and with the right sides facing the consumer
  3. Sequence of placement (i.e. sequence in which the brands’ various SKUs will be placed on the shelf)
There are several apps available to monitor and ensure planogram compliance

Category separation becomes important when there is a key differentiating factor between other brands on the same shelf and yours and even between your own brands. Eg: you may want to place your biodegradable toothbrushes separate from your regular toothbrush SKU.

Colgate has placed its charcoal infused biodegradable toothbrush SKU in a shelf ready unit

Share of shelf

This refers to the space allotted to your brand/SKU on the shelf, by the store. While this is part of the planogram, it is important to address this separately. Enough shelf space needs to be bought or negotiated for your brand, so that your product is displayed practically and advantageously. 

Here, Warburtons Toastie has 10 facings across Medium, Toastie & Super Toastie

You may have heard others referring to facings as a key metric here. This is a key part of shelf space and refers to how many products in your SKU face the customer.

As with the ‘P’ from last week’s blog, Product, today’s ‘P’, Placement also assumes availability of the brand/SKUs in store. Here, we are not just referring to presence but also having enough stock in store to meet consumer demand.

If you’d like to get more information on any of these KPIs, discuss this in more detail or understand how availability can be solved for, especially within the context of today’s fast changing world, email me on veena@salesbeat.co

Product – availability & distribution

Today’s blog is about Product and all the factors associated with it.

The product (brand or SKU) placed in a store is extremely important. Even in the case of large retailers like Walmart or Tesco, not all stores are the same. Each store in a retail chain has a different mix of consumer demographics, dependent on location.

Size of store/store format is a factor that influences this ‘P’.  Another factor is packaging and artwork.

For example, a convenience occasion focussed brand/brand extension with high sustainability credentials aimed at the AB demographic would be far better off launching in stores in & around the city than anywhere else in London. 

Another example is stocking only single serve or sharing size SKUs in city convenience stores and stocking sharing, value added and multipacks in supermarket/hypermarket formats. This is dictated by space constraints in store and also at the homes of consumers.

A convenience store format is more focussed on stocking core products than in product extensions
Hypermarkets will be focussed on maximising sales top get the highest ROI and so will stock a large assortment of SKUs

Retailers typically divide their products into three categories:  

  • Core items that customers always expect you to have in stock and ready for them to buy;
  • Line extensions which are different options to the core product; 
  • Related products or services that make the initial purchase work better.

On-shelf availability is a key factor for this ‘P’. The consumer should be able to find the brand/SKU they want, whenever they want it. This relates directly to the ‘out of sight, out of mind’ principle. 

If a consumer does not find the brand/SKU they want, they will look for a different brand or even a substitute. This leads directly to not just a loss of sale, but also to a share loss. 

In the lead up to next week’s blog on the 2nd P, Place, we would be remiss in not mentioning new product launches. New brand launches or product extensions should be in stores where the target consumer is most likely to buy or sample it. These new SKUs or brands should be in high visibility areas in store and if relevant, with complementary products. Eg. new dip brands or flavours placed next to chips/crisps or in the snacking section. More on this next week!

If you’d like to learn more about the first P, Product and getting your KPIs to a healthy place, email us on veena@salesbeat.co.