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.

Demand planning vs sales intelligence

This blog is about why sales intelligence and demand planning outputs are different from each other. They add value to two very different stakeholder groups.

If you ever do a search/have done a search on Google for sales intelligence for FMCG companies, you’ll find several academic articles on how AI can benefit sales teams in FMCG companies, along with links to several companies that provide AI driven sales intelligence to any other sector than FMCG.

And if you search for demand planning solutions there are an abundance of them, those that use AI and include seasonality, holidays etc to provide forecasts. Ironically demand planning is not used by sales teams. In fact, one of its input factors is a sales forecast from the sales team!

So who uses Demand planning software?

The supply or production planning teams typically use demand planning software to ensure there is enough stock of the final product produced, so that they can fulfil orders and meet demand. Typically, the annual sales plan drawn up by the sales team is one of the inputs into the demand planning software/application. According to an article by Gartner (Aug 2019),  demand planning is typically used by the Sales & Operations Planning team (S & OP team) and focuses on a tactical horizon from 3-24 months.

Demand planning and how it feeds into the S & OP process

The primary goal of demand planning is to ensure availability of stock on the supply side. The process results in a plan that feeds into the Sales & Operations Planning meeting that agrees on the stock that needs to be maintained at a company warehouse level to be able to meet demand for the period being planned.

Now here is why demand planning is not the same as sales intelligence. Have you ever planned your grocery list 3 months in advance? Also, have you ever known a supply team to influence a buyer’s decisions?

Sales intelligence in FMCG

Even a few years ago, sales intelligence in FMCG would have been complex and time taking. Insights teams would look at similar information as marketers do when considering innovations or ad campaigns. However, due to the sheer volume of information, and the time it takes to process the information and gain insights, this happens only for new product development or for market entry initiatives.

Due to recent advances in AI, it is now possible to build applications that process the same quantum of information on a daily basis to provide valuable insights to sales teams, helping them take advantage of opportunities that were never identified by the strategy team or by the demand planning application.

Sales intelligence cycle

Sales intelligence apps are used by sales teams who actively sell into customers.

By empowering sales teams with information on what consumers want and are likely to buy in the next 4-6 weeks or even days, sales teams can ensure 100% in-store availability of the brands they sell. Providing timely sales intelligence helps sales teams take advantage of opportunistic upsides that are in line with long term strategy, leading to increased revenues of up to 40%.

To learn more about FMCG sales intelligence software/platforms, email me on veena@salesbeat.co

Reducing stock outs of personal care & hygiene brands in store

Last week, we focussed on how to reduce stock outs of food & beverage brands in stores. This week we are focussing on personal care & home care brands.

You may think that personal care & home care brands are immune to these fluctuations as consumer buying behaviour is a result of frequency of use and this remains more or less consistent. However as we saw in 2020, consistency & predictability are of the past. Climate change and the pandemic have forced us to behave in ways we have never imagined. These changes in behaviours and their unpredictability have caused brands to go out of stock in stores as companies and sales people rely on out dated information to inform them of consumer demand.

So how do you go about understanding optimal orders for personal care & hygiene brands? For a start, lets look at some of the key drivers of sales for the different categories:

Skin care brands

If you are a salesperson working for a company selling skin care brands, frequency of use is key to understanding demand. Frequency of use is driven by habit, nature of work, if they are office based, home based or site based etc. Now look at how covid/lockdowns have impacted this. How are people interacting with these brands/products at home and how are they expected to interact with offices/restaurants opening up? How have closures of spas impacted sales of skin care products and brands?

Hair care and colour

This shelf is deceptive. While the shelves look relatively full, several colours have gone out of stock. And when it comes to hair colour, consumers are usually reluctant to switch brands, hair types or colour!

Here is one time when historical sales is a good starting point. If you can get hold of store level depletions data across all colours and brands in store, you can get an understanding of the rough split of past demand for various colours. Now look at the drivers – how your target consumer uses your brand and the associated occasions – at home, work, social etc, and then apply how these occasions have changed during current times and its impact on sales.

Personal hygiene

Personal hygiene brands have been impacted by covid & by lockdowns. We separate the two as both these elements, while linked, drive different behaviours in consumers. While the pandemic itself has driven an increased consciousness of personal hygiene and keeping immediate surroundings clean/disinfected, lockdowns have led to a more relaxed stance toward personal hygiene at home.

While previously, the average consumer would have taken a shower at work after a run, the very same consumer now doesn’t think twice about changing into work clothes to attend a meeting immediately after the run and shower only at the end of his/her work day. Think of how else covid and lockdowns have impacted consumer behaviour directly associated with your brand.

Vitamins and supplements

Here’s another category that has been directly impacted by the pandemic. Consumers are more concerned about their immunity now and this has in turn benefitted the vitamins and supplements category. To understand the increase in demand for specific vitamins/supplements within this space, consider what the consumer uses the vitamin/supplement for, consumption occasion, consumer age etc

Diapers/Nappies

Here’s another category like hair colour where consumers are unlikely to switch brands and they definitely will not switch sizes! But you can get an understanding of demand by looking at number of births for a start and then at whether day care/play-schools are open or closed.

Now that you know the key drivers and you have your consumer persona from the marketing team, put them together to get an understanding of consumer demand and depletions in store. And before you ask me, these are real photographs taken just last weekend.

If you’d like to discuss any of the drivers of categories in more detail, feel free to email me on veena@salesbeat.co

FMCG sales in a VUCA world

Vuca – volatile, uncertain, complex and ambiguous.

The acronym is perfect for our world of today. But… it was first used by the United States Army War College in 1987 when developing the curriculum for 1988.

We are all faced with the individual elements of VUCA at some point in life or the other. But when faced with them all at the same time, they can be formidable. Harvard Business Review published a framework in 2014 to deal with this.

Volatility: Change is constant. Accept it and give people(yourself) the space and freedom to think creatively and focus their(your) efforts.

Uncertainty: How do you mitigate uncertainty? By gathering as much data as possible. Invest in collecting information and interpreting it.

Complexity: Build capability and break it down into smaller and discreet actionable tasks. By breaking it down into smaller chunks, you respond on a more timely basis than you would if you were to wait to get clarity. Desmond Tutu once said, ‘There’s only one way to eat an elephant, a bite at a time.’*

Ambiguity: Form a hypothesis based on available information. Adopt a test & learn approach. Test various solutions, learn & iterate.

In the VUCA world that FMCG sales people sell in these days, the same principles can be applied as below:

If you’d like to understand how to derive optimal volumes to sell in these VUCA times, email me on veena@salesbeat.co.

The complex relationship between FMCG sales & data

The prevailing and most common business model in this industry is B2B2C. So while those of us in the tech industry can focus on just one user/customer, this industry has two separate customers.

The Customer: When referring to customers, industry professionals are normally talking about supermarkets, wholesalers, retailers, convenience stores and distributors.

The Consumer: The end user who ‘consumes’ the brand/product.

Both customer and consumer level data are integral to this industry. Understanding how consumers make purchasing decisions (at scale) can be challenging due to the influence of so many different factors on consumers. The results then need to be converted into what it means at a B2B level. This requires an understanding of how people shop and where.

The data needs to be collected and reviewed for sales insights as often as the ordering frequency, so sales people can use this data to discuss orders, promotions, listings and placement with buyers/decision makers. Then, the decision makers at retailers, supermarkets, wholesalers, distributors, convenience stores etc (you get where I am going with this!) need to be convinced that you have arrived at the right conclusion.

This is one of the reasons why direct to consumer brands have been so successful over the past few years with internet becoming the ‘new’ channel. You can now market (instagram, direct emails campaigns, facebook, twitter etc) and sell your brand on the same channel, and increasingly through the same medium (e.g. instagram). In fact, with Millennials and Gen Z now forming a significant percentage of consumers, with a significant internet footprint, companies should be using this data to understand and gauge consumer demand.

With both these generations so used to instant gratification, we do not rule out the possibility that physical retail will co-exist with e-commerce. At the end of 2020, e-commerce was 21% of all sales, up 44% from 2019 and is still expected to grow.

With the B2B2C model surviving into the foreseeable future, companies will need to understand the consumers who buy their brands and what drives them to be able to sell effectively into the aggregators (supermarkets, convenience stores, wholesalers, distributors, online stores etc). Especially so, as social media, climate change (heatwave one day, storm another, cold waves in places where winters are mild etc) and widespread information availability is influencing consumer demand and purchase intent in unexpected ways.

If you’d like to understand how to better use external data points to sell more effectively, email me on veena@salesbeat.co.

The rise and rise of the values/purpose driven consumer

This post talks about the importance of using data to create brands that consumers want. The post also includes a video summarising the content.

For more details, read on!

A basic tenet of branding is that consumers will not buy brands that do not align with their values. Millennials and Gen Z have given new meaning to this.

A study by IBM found that 40% of all consumers, are purpose driven consumers. These consumers have a global presence with the majority, in Europe, South East Asia and Latin America. To this group, the values represented by brands drive their purchasing decision and they are more willing to change their habits to reduce environmental impact than are value (not to be confused with values) driven and product driven consumers.

Then there is the brand driven consumer (majority in India, parts of the Middle East & Latin America) which makes up 13% of all consumers globally. This group stands out in that while the brand is key, this group is even more willing to change habits to ensure sustainability and reduce environmental impact than are values driven consumers. So 53% of consumers are sustainability & values focussed than 10 years ago when value & product driven brands were predominant.

Leading FMCG brands that were also Certified B-Corp, grew by 21% on average in 2017 compared to a national average of 3% across their respective sectors. (B Corp 2018)

It is clear that to drive growth and gain share, FMCG companies need to adopt AND live values that reflect those of their target consumers.

This makes data paramount for FMCG brands. Data on what consumers want, on consumer values, on the channels they frequent and on the boundaries of operation. Brands need to be developed in line with what customers want, like tech companies do with users, rather than how FMCG companies of old developed brands and then told their customers that the brands were what they wanted.