From Shelf To Checkout: How Brands Can
Stand Out At Stores
Life was a lot simpler when the CEO of a consumer goods company
could focus most of his or her attention on marketing to grow a brand. But new
pressures are now forcing them to shift more energy to sales and commercial capabilities.
Tougher competition is making retailers strive even harder to increase store
productivity. And each year sees a rise in the number of shoppers waiting until
they’re in the aisle to choose a brand, often making up their minds in just a
few seconds—and reconsidering their choice every other time they buy.
Meanwhile, the number of products is continually expanding while shelf space
shrinks, due to the rise of private labels and smaller retail
formats. Faced with increasingly complex decisions about which products to
place where and how to properly activate them, sales teams are often
ill-equipped to make the right trade-offs. As a result, shelves are cluttered,
promotions are inadequately executed, brands struggle to stand out, and sales
productivity ratios stagnate, at best.
More than ever, regaining control of the in-store experience is
critical forbrand growth.
How are winners getting it right? Drawing heavily on shopper
insights to understand their category’s rules, successful companies zero in on
the sales drivers they need to pursue. They use that knowledge to sketch out
what an ideal store should look like in order to deliver the greatest results.
This is their “picture of success”—a vision of which brands and SKUs to place
in each store, where to place them, how many facings, what type of layout and
what promotions to activate in a way that will best convince shoppers to buy.
They use this vision as the basis for every important decision, from
negotiating with key accounts to tracking and compensating sales reps. One
invaluable result: The sales capability can be measured, becoming more of a
science than an art.
Winning companies
typically follow three basic steps:
Identify which critical in-store assets to own and how to optimize
them. Leading companiesdetermine which assets in
the store—from the actual category shelf and secondary placements to promo
slots and signage—they need to control and optimize to outperform rivals. For
snacks or gum, for example, this might mean being present at the checkout
counter in traditional trade or controlling promotional hot spots in
hypermarkets.
One maker of jam was able to boost net sales by an average 15% to
25% within four weeks in pilot stores by taking control of in-store assets. By
arming its account managers with the information that the brand’s 30% share of
shelf space was significantly lower than its 50% overall market share, they
were better able to negotiate with store owners for more space. Knowing that
89% of jam shoppers already have their flavor in mind when they enter the store
allowed the company to better organize the shelf. And understanding the variety
of uses consumers have for jam, allowed it to identify and make the most of the
right hot zones for secondary placement. By placing its jam near waffle mix and
cold meats, for example, it knew it would increase the odds of reaching not
only the 75% of shoppers who come into a store knowing they want jam, but also
the 25% who don’t.
Plan “store back,” not “marketing forward.” From strategy to
brand planning, trade marketing and sales, leading companies refocus their
business routines to defining and executing against the ideal store. This
“store back” approach requires companies to take stock of constraints in
shopper attention, in available store space and in sales execution capacity,
and use those constraints to develop brand strategies fit for winning at the
point of sale.
Brand teams have clear touch points with customer teams, forcing
them to go back to what actually succeeds in the store in order to define their
brand plans. As a result, the best companies know how a new product will be
activated in the store well before they approve it. Their product portfolio is
based on space availability, their merchandising plans on placement
feasibility. Promotional plans and new SKU listings are tied to their top
customers’ commercial calendars. Not only does this help a company focus on
what can succeed in a particular store, but it also has the benefit of
streamlining the organization to what matters most. It ends the days of
bloated, product-focused organizations.
Deliver consistent, measurable in-store execution. Finally, leading
companies establish a system to ensure that their brands are unfailingly
activated in the store as intended. They lay out clear steps for sales reps to
follow before, during and after store visits to ensure compliance to the
picture of success. Scorecards measure whether or not each sales rep performs
those activities in each outlet. Sell-in activities such as shelf visibility or
product availability become performance metrics tied to salesforce
compensation, replacing output measures such as sales volume, which may feel
unattainable or lead to misguided incentives. Forward-thinking companies rely
on technology solutions, such as handheld devices or online portals, to monitor
performance. Not only does this increase sales reps’ in-store effectiveness, it
also frees up time for them to visit and improve other critical stores.
In both traditional and modern trade settings, the results can be
impressive. In one European market, a food company saw stores that had
implemented a sales excellence program achieve 70% more volume uplift than
non-program stores. Another company saw a similar effort deliver an uplift of
more than 15%.
Based on our experience,
companies that rediscover the potential inside each store can watch sales grow
by an additional 5% to 15% each year. But this improvement needs to be earned
again and again. Shopper behavior and the retail environment continually
evolve, and even the best picture of success needs to be updated. In the era of
super-fast shopper decisions and dwindling shelf space, the store has become a
must-win battleground. Brands no longer can afford to stand still—or leave
anything to chance.
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