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

Retail execution in FMCG

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