Heatwaves – Making the most of demand

We are only just past halfway through 2022. However, this year has already been extraordinary in many respects, one of which is the record breaking number of heatwaves we’ve seen so far across the world. For those interested, this Wikipedia page lists all the heatwaves in 2022 to date.

Impact on sales

A comparison of sales in the 12 weeks to 10 July 2022, to sales in the 12 weeks to 11 July 2021, shows mixed performance across grocery stores in the UK, with discounters gaining the most, due to consumers switching to them to minimise their grocery spend in light of soaring inflation.

However, despite current inflation rates, BRC-KPMG retail sales monitor for July 2022 showed that total sales increased by 2.3% during the month, bringing to an end three consecutive months of decline.

Ice cream, beer, water & barbecue ingredients sales benefitted the most from the heatwave, while sales of barbecue grills themselves rocketed during this time despite fire hazard warnings. Outdoor furniture sales also benefitted, as more people planned to spend time outdoors in August. Clothing retailers also benefitted during this time.

Gelato & ice cream brands and vendors benefitted all through Europe, as people consumed them in a bid to cool down.

US grocery sales, in the meantime, also benefitted from this, albeit in a different way. Online grocery sales saw the most increase at 17% vs prior year in July, as more consumers sought to avoid travelling outside during this time.

On the overall, US supermarkets benefitted from increased demand during this period, with Albertsons companies benefitting the least at 10% growth vs prior year.

However, some delayed impacts of these heatwaves are yet to come. Typically, for regions that have high humidity levels, heatwaves bring with them increased demand at a later date for anti mould and anti fungal products. Also, shampoo, conditioner, anti frizz hair products and shower gel sales increase following heatwaves as people use these more frequently during heatwaves than they usually do.

So how can you best prepare your store for these heatwaves?

Keep an eye on weather forecasts by reputable agencies. When a heatwave, storm, cold wave or any unusual weather event is expected, look at temperatures expected, humidity levels etc and consider how these, in combination, will impact human behaviour.

For instance, a heatwave is declared in the UK anytime the temperature rises above 25℃ or 26℃. When temperatures are between 26℃ & 32℃, people plan to and are likely to go out, and enjoy the warm weather outdoors. So sales of certain products like beer, wine, water, picnic essentials, barbecue ingredients etc are all likely to increase a few days ahead of these heatwaves. Sales of these products continue to stay elevated during the heatwave as some consumers maybe more impulse led than others. During this period, depending on humidity levels, sales of anti frizz hair products and brands may also increase.

However, when temperatures increase beyond 35℃, sales of these products may not increase as much, as some people may prefer staying indoors where it is cooler. Also, impulse sales will not be as high at stores, and may move to quick commerce channels, as more people want to avoid the heat outside.

When a heatwave is expected, looking at humidity and dust levels is important when considering what and how much to reorder as they impact demand for shampoos, conditioners, moisturisers, home cleaning products and laundry products.

Sound complex? That is because, it is

Impact of changes in weather can be difficult to predict when looking at things in isolation. So consider not just weather forecasts, but also the demographics of consumers around your store location. People from different countries behave differently when it comes to weather. So if your store is located in a cosmopolitan area, consider how people from different backgrounds may react differently to these changes.

If you’d like to learn more about how to prepare for unexpected weather events and maximise sales during these times, email me on veena@salesbeat.co

The changing world of customer experience in FMCG

Forrester Research defines customer experience as “how customers perceive their interactions with your company.”
Customer experience in FMCG starts with how customers become aware of a brand/company and ends with any interactions with the company’s team for returns, damaged products etc. This includes any activities the brand team or company may undertake to increase awareness and encourage intent to buy. Eg: sampling campaigns, surveys, free product, in-store promotions etc.

Customer centricity aka customer experience aka CX is becoming an increasingly important business KPI in FMCG companies and retailers.

Why is CX becoming increasingly important in FMCG?

When customers (consumers) have positive experiences while interacting with a brand, they tell others about their experience. They do this through reviews on retailer/brand websites or on their social media accounts. This is free word-of-mouth advertising for the brand. Positive customer experience can also encourage brand loyalty and repeat purchases. 

But how do you improve CX if you don’t sell to the end consumer?

This is the case for many FMCG companies that sell their brands through distributors, supermarkets & convenience stores. For these companies, retail execution is key to unlocking superior customer experience. They employ various strategies including ‘shop in shop’ concepts, interactive brand discovery on screens, samplings/tastings, product experiences and brand videos. In-store brand ambassadors (sales people) who are knowledgeable about the brand who consumers can talk to and learn more about the range are extremely effective. Brand ambassadors can not only sell effectively to consumers, but they can also act on/pass on to relevant brand teams any feedback the consumer gives.

However, the pandemic has accelerated change in how consumers/shoppers buy and experience brands. Previously, it was important to have a great brand website and an e-commerce portal. Now it is vital that consumers are able to access the brands without travelling to a store.

A few recent CX stratagems employed by brands

Below are a few examples of superior CX which have generated considerable interest from consumers and have translated to sales in these challenging times.

‘Lumi’ by Pampers:

The Pampers team came up with Lumi as a way to address the plentiful worries a new parent has. The goal wasn’t just to sell Pampers. They understood the worries that new parents have about their baby’s sleep routine and created an app that acts as more than a baby monitor. Lumi monitors their baby’s sleep patters, tracks diaper wetness to alert parents and provides actionable insights on how to sleep train their baby. Lumi is all about the baby and providing the baby’s parents with peace of mind.

By making the baby’s comfort and development the core of the Lumi app/monitor, Pampers has delivered a truly superior customer experience that will encourage new parents to buy Pampers diapers. The ones that work with Lumi are only 4 cents more expensive per diaper than regular ones.

To top this all off, the Pampers website is all about expecting mothers and the baby. While there is a section on ‘products’ that lists the Pampers range, most of the website is about the various stages of pregnancy, and about babies and their development. You cannot get more customer centric than that!

Heineken Silver in the Metaverse later launched in real life

Brewed with pixels, Heineken Silver is the world’s first virtual beer. Heineken launched its ‘digital’ beer inside the company’s virtual brewery. According to the company, the beer is made of the finest, 100% computer-generated ingredients, brewed with Binary Coded Hops grown by NPC (non-player character) farmers.

Heineken partnered with self-taught street artist, J. Demsky to design parts of the virtual brewery. According to several attendees, the launch event was (intentionally) bizarre, later confirmed by Heineken.

Bram Westenbrink (from Heineken) said, “We know that the metaverse brings people together in a light-hearted and immersive way but it’s just not the best place to taste a new beer.

Our new virtual beer is an ironic joke. It is a self-aware idea that pokes fun at us and many other brands that are jumping into the metaverse with products that are best enjoyed in the real world.”

In an ironic twist, Heineken took Heineken Silver from the Metaverse and launched it in real life last month.Taking this further, Heineken unveiled a series of FRTs – For Real Tokens – collective art pieces by Spanish artist, J. Demsky, poking fun at the NFT culture during the launch event.

Heineken was not afraid to poke fun at themselves with the launch of Heineken Silver in the Metaverse. By sharing this experience with their loyal consumers and providing an unforgettable experience for new to Heineken consumers, the brand built strong rapport with their consumers.

Launching Heineken Silver in real life showed they listen to their consumers and is a key element of CX.

AB Inbev’s digital horses and their vision of Metaverse beer which can be delivered in real life

AB InBev moved into the virtual Ethereum based game horse racing platform Zed Run. According to Lindsey McInerney, “brands should parallel in the metaverse what they do in reality”. 

With its history of sport sponsoring, especially horse racing, AB InBev was eager to be among the first to start one in the metaverse. They moved into the virtual Ethereal based horse racing (game) platform by an Australian start-up. The virtual horses on Zed Run are ‘breathing non-fungible tokens’. While users are able to name their horses, how their horses behave on the track is defined by algorithms based on characteristics such as their bloodlines, just like in real life.

According to Adformatie, Stella Artois created a set of unique horse breeds for Zed Run, with Stella Artois-themed skins and a 3D racetrack. According to Forbes, these unique horses were sold for millions of dollars for the digital races.

This creates an entirely unique customer experience for the target consumers for Stella Artois and Budweiser. They have created a new of way of reaching their target consumer and providing them with an unforgettable brand experience.

According to McInerney, the vision is to some day have people from different parts of the world attend the races together, buy a round of beer at the races and have them be delivered in real life, so friends can virtually attend an event and have a drink both virtually and in real life.

By creating new ways for people to get together and bond, AB Inbev is providing its existing consumers with an unforgettable experience that they are unlikely to forget. Also, they have created an innovative channel to reach their target consumer and encourages trial.

There are several other brands leveraging technology to create unique customer experiences. If there are any brands in particular that have grabbed your attention, please email me with details at veena@salesbeat.co so we can include them in another blog or cover them in our podcast. The next Salesbeat blog will look at how retailers are leveraging technology for superior customer experience.