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.

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

Reducing stock outs in stores

This blog focusses on how sales people can reduce out of stocks at supermarkets by considering their target consumer behaviour over the last year and how likely this is to change.

Due to the sheer volume of out of stocks we’ve seen on shelves in the last few weeks across several supermarkets, we’ve decided to focus on how FMCG sales people can reduce out of stocks of their brands at their customers’ stores.

Breakfast category

This is a common sight at most grocery stores now. Popular brands and flavours out of stock on shelves and in retailer warehouses. And when customers switch brands as a result, this is highly likely to result in loss of share. How can this be prevented? Keep the consumer in mind when discussing orders with buyers. What are your consumers doing now? How do you/your family eat breakfast now? On the go or at home? How can this impact sales of your brand and should you be discussing larger orders as a result?

Milk alternatives, sugar & sweeteners

These are the shelves you never expect to see low on stock (except during panic buying) in the normal course of events. We take it for granted that your local store always has milk/milk alternatives, sugar and honey. However, since consumer habits underwent a radical change during the pandemic, more people make coffee/tea/their beverage of choice at home now instead of making/buying at work or on the go. This has driven a higher rate of sale of this category. Sales people working for brands within this category should take into account how many of these out of home consumption occasions have been replaced by at-home consumption. And their brands share of those occasions.

Condiments & Carbs

These are photographs from 3 different stores. You may wonder if these are stock photographs from 2020, but these were from different supermarkets just this last weekend (8/9 May). While some of you may attribute some of this to Brexit (Olive Oil & Pasta), the rice, frying oil and Asian condiments are not imported or packaged in the EU and so Brexit should not have an impact. When selling brands/SKUs in this category to customers, consider how consumers have been eating during the pandemic. Are they expected to continue this behaviour or will lockdowns easing have an impact?

Confectionery & snacks

Confectionery and snacks have seen varying impacts during the past year. While brands in the mint and gum category have seen a drop in demand, the remainder of the category has seen a significant rise party due to stress eating and partly due to substituting holidays for treats. As lockdowns ease this is the one category that is likely to see a swing in demand. Consider consumer motivations and drivers for this category when discussing orders. More social occasions = more mint/gum sales. More social occasions = drop in sales of snacks as well. However, home/office working also has a significant impact on sales of snacks. The quantum of change for each brand depends on the brands, their consumption occasions and how many industries/companies decide on a return to work vs continuing remote work.

Beverages

Non-alcoholic & alcoholic beverage brands have experienced stock outs over the past few weeks/months. While some of this may be attributable to supply chain constraints around aluminium cans, why are the same products in bottles not available in greater quantity? Why not use the empty space for the same brand in other formats/packaging? For brands not constrained by this, why limit sales to pre-pandemic levels? Consider how your target consumer has changed his/her way of consumption over the past year and how likely it is to change.

The pandemic has forced us all to behave and consume products differently over the past year. This has now become a habit and habits do not change easily. So if you are a sales person selling FMCG products that are not in any of the above, think of the impact of the last year on the brand/product. Has the consumption occasion changed? If so, how has it changed? For example, consumers buy and use more cleaning products and personal hygiene products now than they did before the pandemic. This is now an ingrained consumer behaviour that is unlikely to change in the medium term.

Not unless there is another significant event that forces us to behave differently.

Easter eggs – the stock out no one expected in 2021

This blog is about why Easter eggs went out of stock for Easter 2021.

The news outlets and consumers all agree on one thing. Easter eggs were out of stock for Easter 2021.

There were several angry and disappointed customers tweeting about the shortage and news outlets are also talking about this.

It certainly wasn’t caused by people stockpiling Easter eggs. Some speculated that this was caused because people did not buy them early enough. According to an article in The Guardian, Asda said it had seen a surge in hot cross buns, individual chocolate bunnies and even novelty bunny ears, while sales of Easter crafting, decorations and games were up a whopping 207% year on year.


They are using 2020 to compare 2021 with. The Easter Egg orders for 2021 were made based on 2020 sales. Now what do you think is wrong with this statement?

In March 2020, everyone was going into lockdowns, vs April 2021, when lockdowns were easing. When UK retailers were placing orders for Easter eggs in late 2020, lockdowns had eased to a large extent and was in the period just before the next lockdown.

So why did retailers use 2020 orders as baseline for 2021? They anticipated an increase vs 2020, but the increase was not enough to account for normal consumption rates pre-covid.

For those who know this industry, it wouldn’t come as a surprise. Retailer orders are based on or pegged to previous year sales, not based on expected consumer demand. However, consumers do not replicate consumption habits year on year.

Retailers and the brands that sell into retailers need to be more data driven when they place orders during these fast changing times. Consumer preferences and the factors that influence them change on an almost daily basis these days. Expecting consumers to mirror previous year sales and pegging their consumption to previous year sales plus an uplift results in the two extremes – under stocking (lost revenues/sales and angry consumers) or overstocking (cost of the working capital involved).

To learn more about how to use data to predict consumer preferences and order volumes, email me on veena@salesbeat.co